A rundown of the beer stocks with the highest potential for gains this new year.
Much like other alcoholic beverages, the great thing about beer is that it has been around for thousands of years and will likely continue to be consumed for thousands of more years to come.
From its early years being brewed as an alternative to water to becoming everyone’s favorite beverage to turn to for occasions and past-time alike, beer is practically a staple good in the market. This means that, when it comes to investment, beer stock is as safe a bet as an investor can make where the stock market’s concerned.
That being said, the beer industry is almost closed-off against new players. Most of the companies on this list have been around for decades, if not centuries, and essentially dominate their sector of the market. Although there is some new blood looking to make a scene, investing in big, established companies isn’t always a bad thing – especially when evolution and dividends are there.
In this article, we’ll go over the top 10 beer stocks for 2022 and let you know exactly why we think they’re ideal investments.
Top Beer Stocks for 2022
Investing in beer stocks should definitely be on your radar for this year, so to help you decide where to invest your money in this timeless industry, here’s a list of the beer stocks with the most chance of earning big this 2022:
1. Ambev (NYSE: ABEV)
Market value: $44.4 Billion
One of the largest breweries in South America, a place where the love and tradition of beer runs strong, Ambev is a Brazilian-based company that’s often considered the largest in its hemisphere. It was created on July 1, 1999, with the merger of two breweries, Brahma and Antarctica.
In a region with a growing middle class, and many nations with rapidly growing economies, Ambev is well positioned to cater to this growing market.
Other than beer, the company also boasts quite the diverse portfolio, being a producer and distributes soft drinks and other nonalcoholic beverages, including non-carbonated beverages.
In its earnings released for the first quarter of this year, issued on May 5, the company reported 29.1% year on year improvement in profits on solid net revenue growth. Furthermore, income investors might be pleased to learn that the company offers a pretty decent dividend yield of 7.85%.
Although the stocks of this company leave a little to be desired, the quarterly dividends and the prospect of dominance in emerging markets is enough to make Ambev a viable investment in our eyes.
2. Anheuser Busch Inbev SA (NYSE: BUD)
Market value: $90.18 Billion
Holding the distinction of being one of the world's largest beer companies, Anheuser Busch Inbev SA has ownership of a plethora of beverages. Among the most notable of their hundreds of holdings include Budweiser, Stella Artois, Beck's, Leffe, and an assortment of acquired craft brewers in the U.S.
Its size and large portfolio can be in part attributed to its numerous mergers. The company in its current form is a result of a merger of U.S. brewer Anheuser-Busch and Belgian-Brazilian brewer InBev in 2008, as well as the acquisition of South African brewing giant SABMiller in 2016.
Anheuser Busch Inbev SA has had somewhat of a rocky time in the market with stocks decreasing in value by -48.45% over the past 5 years. In fact, since the company’s listing back in 2008,this beer stock companies shares are only up about 50% compared to more than 400% for the S&P 500. Many have speculated the sluggish growth to be caused by changing consumer preferences.
Despite that, the management has hit the reset button and is now looking to pick up some steam in the global arena. Shares are slowly rebounding with gains of 4.04% year-to-date.
Anheuser Busch Inbev SA also offers a nice dividend yield of 1.85% which is sure to attract income investors. At any rate, investors would be wise to hold back a little before placing confidence (and money) into Anheuser Busch.
3. Diageo PLC (NYSE: DEO)
Market value: $119.2 Billion
By far the largest company on this list, this UK-based company is the world's largest producer of Scotch whiskey and the owner of beer brands like Guinness, Harp Lager, Kilkenny, Senator, Meta Abo, Smithwick's, and Tusker.
In addition to beer and whiskey, the company offers other branded alcoholic beverages, including vodkas, tequilas, and gins.
Just last year, the company announced it had begun construction of a $75 million distillery in Yunnan Province, China, with the intention of producing salt-malt whiskey. This promised a lot of great things for the company since China is the world’s largest beverage alcohol market.
4. United Breweries Co. Inc. (NYSE: CCU)
Market value: $9 Billion
Also known as Compañía Cervecerías Unidas, this company is one of a few that dominates the South American market. It has operations in Chile, Argentina, Bolivia, Colombia, Paraguay, Uruguay and Peru.
Other than beer, the company also produces wines, spirits, and non-alcoholic beverages such as soft drinks, bottled water, and juices.
Although the stocks of this company have been showing lackluster performance in recent years, the company’s most attractive quality is its dividend yield of 15.38%. It also beat its revenue expectations with a 4.74% gain.
And having a history spanning more than 120 years, the company is a resilient option if nothing else.
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5. Boston Beer Company (NYSE: SAM)
Market value: $13.62 Billion
Founded in the 1980s, the Boston Beer Company is one of the smaller beer companies on this list. The creator of the Samuel Adams craft beer label, Truly Hard Seltzer, Angry Orchard hard cider, and several other small regional brewers, the boston beer company makes a name for itself as a supporter of the independent craft beer movement.
Though it has grown considerably over the last 5 years, its smaller size and localized structure worked against its favor during the pandemic. Hurting initially from the logistical issues, the sharp increase in home consumption of beer turned out beneficial for the company’s sales and is probably what kept it afloat despite the circumstances.
With zero debt and consistently double-digit sales, the company is still a favorite among growth investors looking for a worthy underdog. It’ll be interesting to keep track of the company’s growth post-pandemic.
6. Constellation Brands (NYSE: STZ)
Market Cap: $44 Billion
Unlike the previous entry, Constellation Brands Inc has had a better few years growth-wise. Despite being around since the mid-1940s, it’s not necessarily a well-known company although it produces some of the most well-known and well-loved beers in the world. Some of these brands include Corona, Modelo, and Pacifico.
It also gets plus points for having one of the largest and most diversified portfolios of any alcoholic beverages company. Apart from beer, Constellation Brands Inc has several beer wine and spirits under its belt as well as an almost 40% stake in Canopy Growth, a growing marijuana company.
Other than beverages, the company is also engaged in a $4 billion investment in Canopy Growth. Canopy and Acreage Holdings (its U.S. counterpart), are set to release a line of THC-infused beverages in California and Illinois this summer. Depending on where you stand on the growing cannabis market, this could be a highly lucrative venture for the beverage giant.
7. Molson Coors Beverage Company (NYSE: TAP)
Market value: $9.9 Billion
Considered to be a value stock, a stock that’s underappreciated, investing in beer stocks such as Molson Coors Beverage Company is a bet on the likelihood of its stocks to rebound in price. Over the past 5 years, the share price of Molson Coors went below -50.87%, although it has gained by 853.20% since its going public.
The parent holding company for Coors, Miller, Blue Moon, Molson Coors Beverage Company is still the 5th largest beer enterprise in the world despite the recent losses. This has led many analysts to believe that a rally for the stocks is underway if the management successfully turns things around.
A great sign of this is their recent reinstating of dividend payments, about 2.85% in yield.
There are also plans to tap into the more high-end beer-drinking market with trendy beverages such as sparkling hard seltzer. This is to align itself more with the shift in customer preferences towards the more flavored-kind of beers.
8. Heineken N.V. (AMS: HEIA)
Market value: $52.19 Billion
Heineken is a 140-year old Dutch brewing company that owns over 165 breweries in more than 70 countries, producing 250 different beers and ciders. Apart from its world-famous Heineken, the company is also known for brands like Amstel, Red Stripe, Bulmers and Strongbow.
With high dividend payments and stock prices experiencing a resurgence since March, the company is coming out strong after years of volatility.
9. Carlsberg A/S (CPH: CARL-B)
Market value: $18.1 Billion
In the region that this beverage company operates in, you’d be hard-pressed to find a worthy competitor. This Danish multinational brewer , founded in 1847, has the flagship brand is of Carlsberg including other notable brands like Tuborg, Kronenbourg, Somersby cider, Neptun, Russia's best-selling beer Baltika, Belgian Grimbergen, Fix, one of Greece's oldest brands and more than 500 local beers.
Operating mostly in Easter Europe, Russia, and Asia, the company has a lot to show for in its storied history.
In terms of long-term investment, the company’s stocks have gained by more than 16% over the past 5 years. And although that might not seem too much, take into account that the stock’s share price has gained by 293.68% since the year 2000.
10. S&P 500 Consumer Staples Sector Index
Market value: N/A
If you’re looking for a way to invest not just in one of these companies, but in as many beer and beverage companies as possible, the S&P 500 Consumer Staples Sector Index is the place for you. Investing in this allows you to reap the rewards of the top 500 consumer staple companies in the country. That means food as well as drinks.
A trade off of this though is that you might realize relatively low returns as opposed to betting on a company directly.
And those were the 7 best beer stocks to consider buying this 2022. Even with the challenges that face the beer industry, like evolving consumer demand and the pandemic, the beer industry is still projected to grow, reaching over $685 billion by 2025. And with many of these companies being over a century old, they’re a stable investment option over the long term.
With the right research and careful following of the experts’ advice, there’s no reason not to believe that an investor can earn an intoxicating profit from the stocks of beer companies this 2022.