A quick but comprehensive list of the best coffee stocks to buy in 2023.
Let's be honest, America Loves it's Coffee, in fact - after water and tea, is the most consumed beverage in the world, making the coffee industry worth looking into. Since time immemorial, coffee has been a mainstay in the lives of countless human beings and, to many, it's nothing less than an essential good.
What Are Coffee Stocks?
Now any investor can tell you that having, investing in, or owning a part of anything that people consider to be essential to their life is one of the surest ways to earn profit.
Even owning stocks of coffee, a thing that's basically a routine part of almost every working person's morning routine, is money smartly invested. The coffee industry is not worth OVER $100 Billion, so why not get a piece of the pie?
The coffee industry is filled to the brim with potential, and for any investor looking to get their share of the profits, they have plenty of opportunities open before them.
In this article, we're going to consider some of those investment opportunities that may prove promising in 2023.
But which coffee stocks are the best of the best? Well let's find out!
The Best Coffee Stocks for 2023
Well, for your education and potential investment-making, here are the 7 best coffee stocks to buy this year:
1. Keurig Dr. Pepper (NASDAQ: KDP)
Market Value: $49.64 Billion
Coming in #1 in our coffee stocks list, this is the company that sells the famed Dr. Pepper & cherry sodas that we know and loves. The company we know today is a result of an acquisition by Keurig Green Mountain of the Dr. Pepper Snapple Group in 2018. Since then, Keurig Dr. Pepper has been doing quite well in the beverages industry -- providing juices, soft drinks, and even coffee to Americans and the world.
Keurig Green Mountain's coffee sales in particular have seen great improvement in 2023 -- attributed to the fact that many people have been making coffee at home. The superstar of their products is their namesake machines and coffee packets which provide their people with cafe-quality coffee quickly and in the convenience of their own home.
With a history of coffee roasting that began in the 1980s in Vermont, the company has had a steady trajectory upward and has recently just rebounded from the market crash of March 2020. Income investors also enjoy the continuation of a quarterly dividend and a dividend yield of 2.13%, so we'd say that investing in them would be a wise idea.
2. Starbucks Corp. (NASDAQ: SBUX)
Market Value: $140.87 Billion
#2 on our top coffee stocks list is Starbucks, and with good reason! What person doens't enjoy a Starbucks coffee every once in a while? Truth be told, the massive cafe/restaurant chain has weathered many trials and tribulations over the decades since its founding in the 1970s. Now, the corporation has over 30,000 stores worldwide, enjoys a massive market cap, and pays a regular dividend of 1.61% -- if that's not a worthy reason to invest in a company then nothing is.
One of the main reasons why Starbucks corp. was able to survive and even do well during the pandemic was its seamless transition to a solely take-out and delivery form of transaction. Where other brands struggled -- the company was able to ensure that it was still operational and earning revenue despite lockdowns. This is why Starbucks is our #2 in the best coffee stocks list.
Starbucks shares hit an unprecedented high during April of 2021 and, as restrictions around the world are starting to ease, the company has plans for the opening of more stores in emerging markets and fine-tune operations. Investing in Starbucks stocks now will definitely be a wise choice for long-term positions.
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3. Monster Beverage (NASDAQ: MNST)
Market Value: $48.64 Billion
Indeed, the first thing one thinks about when one thinks about coffee stocks. Recently though, the company has been making some exciting twists to coffee that is poised to make waves in the market -- especially among the more flavor-adventurous youth.
Java monster comes in 10 different flavors and is a marriage of coffee, cream, the monster's usual energy-boosting properties. This is one product that's aimed at those who love the taste of coffee but are also looking for something strong enough to give them the energy to last the day. If it's not obvious right now, this is our #3 in the coffee stocks list, and definitely worth keeping an eye on!
The company itself was founded in 1935 in California but only began selling energy drinks in the early 2000s. Despite the pandemic, the stocks performed surprisingly well and had it's best numbers yet at the end of December 2020.
And now that Coke has recently announced the pulling of its energy drink brand from the US and Canada, Monster Beverage is being given even more room to take the market.
4. J.M. Smucker Co. (NYSE: SJM)
Market Value: $14.06 Billion
What article on Coffee Stocks would not be complete without J.M. Smucker, the company owns several coffee brands including Folgers, 1850, and Cafe Bustelo. They are one of the best players in the home coffee consumption market and are likely to grow with the current spike in coffee drinking.
They are also the owners of Dunkin Donuts' at-home coffee range though are not part of the greater Dunkin Brands Group.
The company is also one of the best options for investors looking for high-dividend-paying companies. The current dividend yield of J.M. Smucker Co. is 2.64%. Reports showed the stocks performing very well throughout lockdown as at-home coffee consumption was at an all-time high.
The portfolio is also very diversified with products that range from peanut butter to pet food.
5. Coffee Holding Co. (NASDAQ: JVA)
Market Value: $30.03 Million
It's likely you haven't heard of this company yet but, if you're looking for penny stocks to buy and wait out for growth, then this coffee stocks company is for you. Based in New York, the company has a few coffee shops under its belt and a few small coffee brands.
Their main point of interest is providing organically grown and gourmet quality coffee to restaurants and home consumers alike. They also possess brands that manufacture coffee-making barista-level equipment for home use.
These are things that are quite trendy among people now and taking advantage of such a cheap stock can place you in a position wherein you can benefit from its rapid growth.
They have managed to keep the value of their stock growth over the past 6 months and, in January of this year, had a breakout moment -- the value of their stock increased by 10%.
Selling at only $5 per share at the time of writing this post, this is definitely a penny stock. Investors should know though that as fun as it is to invest in something so fresh to the market and with so much potential, penny stocks are by nature highly volatile and high risk. The company is definitely performing well but one needs to do proper research before investing large sums of money for the promise of future growth.
6. Restaurant Brands International (NYSE: QSR)
Market Value: $29.53 Billion
When it comes to coffee companies, everybody in North America knows this name. Restaurant Brands International owns Tim Hortons, the largest coffee shop chain in Canada. Tim Hortons also has coffee shops in America, Europe, and Asia. They have been around since the 1960s and are often considered an integral part of Canadian culture, making this a 'must have' for those investing in and collecting coffee stocks!
The coffee industry was one of the ones hardest hit by the Covid-19 lockdowns. Tim Horton's shares bounced back quickly after the crash in March of 2020. Though profits took a hit due to lockdown, their quick move to take-outs and deliveries saved it from further damage and it definitely did not see the same amount of losses other brands did.
Income investors also gravitate towards the more than 3% dividend that Restaurant Brands International pays out. It should be noted though that the frequency of payout to investors fluctuates.
On top of dealing with coffee, Restaurant Brands International is also the owner of famous restaurant chains like Burger King and Popeye's Louisiana Kitchen -- offering even greater sources of income now that people are allowed to dine in more and more. Definitely add restaurant brands international to your list of stocks to watch this year!
7. Nestle (OTC: NSRGY)
Market Value: $331.95 Billion
Formed in 1905, Nestle is listed as number 33 in the 2016 edition of the Forbes Global 2000 list of largest public companies. The fact is, this swiss company is absolutely massive and is one of the few companies that see annual revenues of $1 billion.
For about 80 years, Nescafe, Nespresso, and other Nestle coffee products have been a strong force in the coffee market and are often the first choice for many people looking for affordable coffee options.
Nestle also works closely with Starbucks and is often approved to package the latter's products for use at home. It is also the largest shareholder of L'Oreal, the world's largest cosmetics company.
Needless to say, investments in multinational and historic companies are stable investments. Recently, the current stock prices of the company have been trading higher than this time last year and are looking to continue on an upward trajectory as the pandemic winds down.
Conclusion on Our Coffee Stocks List
Why are investments in coffee stocks worth it? Well, the fact is it's such a highly consumed beverage that it might as well be considered a staple good -- like water, meat, and bread or rice. Staple goods are essentially considered to be recession-proof, thus, are optimal investments for those looking to secure long-term income.
More so than coffee shops and cafes, the industry has successfully shifted to home-based coffee selling and has etched out renewable income in machines that require coffee pods.
And with social media trends hyping up the need for coffee, chances are the consumer base isn't going anywhere soon. The only choice that remains is how best you, as an investor, will capitalize on that demand. With proper research, a good strategy, and a favorable market, coffee will end up being more than just part of your morning routine.
Should You Buy Coffee Stocks?
Perhaps the most obvious case for buying coffee stocks is simply because demand appears to be strong and rising across the globe. There has been a notable pick-up in emerging market growth and consumer confidence in developed markets like Europe and Japan continues to improve as well, which suggests higher spending on luxury products.
In fact, many developed markets have been posting healthy GDP growth rates above 2% over the past year which could be indicative of a "Goldilocks" type economy where unemployment is low and the growth rate remains steady as opposed to an economy that veers from contraction to expansion as we saw during much of the post-financial crisis years.
The other factor potentially driving coffee stock prices higher is that both businesses are well-known consumer brands – all things equal this should drive pricing power at margins and allow the companies to pass along any cost inflation to consumers.
In the investment community, there is a saying that if you want to beat the market, you have to do things differently. In other words, if everyone else is buying something, you should probably be selling and vice versa. In this case, we are going to take the approach of doing exactly what everyone else is doing - we are going to buy coffee stocks!
Specifically, I am talking about coffee companies like J.M. Smucker (SJM) and Keurig Dr. Pepper (KDP). The reason for this approach is fairly straightforward: If strong demand due to strong global economies continues then it seems likely that these types of businesses will continue growing their earnings at high rates with low-double digit or even higher growth rates.
In addition, these types of businesses should be able to use their strong earnings growth to either buy back stock or increase dividends – both of which drive stock prices higher.
In closing, I am not in any way advocating for buying coffee stocks in general. I would be more inclined to buy individual names in this industry, but it doesn't hurt to consider the benefits of adding some exposure to strong global demand stories like coffee by simply adding J.M. Smucker and Keurig Dr Pepper (or one of the other 3) to your portfolio.