Top 6 Distillers & Wineries Stock to Buy in 2019
Wine is becoming more popular among the younger generation, and millennials are consuming more wine than other generations. There are not many wine or distillery companies that trade publicly, although the increased demand could have strong benefits to the sector. Furthermore, many analysts believe that cannabis is likely to eat into beer sales. However, legalized weed should not hit wine or spirit sales.
Alcohol companies in general are considered defensive in times of economic slow-down, as consumers will still buy alcohol in recessions. The industry also just went through consolidation last year, where smaller players were acquired and there were some mergers. Now, in 2019, many publicly traded distillery and winery companies are regaining their footing.
Here are 6 distiller and winery stocks to buy in 2019:
🍷 Distillers & Wineries
Corby Spirit and Wine (A) (CSW.A-T)
A alcohol manufacturing company that is based in Ontario. They paid out a special dividend at the end of 2018. They generate a high cash flow and some expect Corby Spirit and Wine to get into the cannabis space.
A solid company with a good balance sheet and nice yield. There is a modest opportunity for upside. Since 2012 they have traded between 2.5 and 3.5 times book, with a downward basis trend. The share price is unchanged in ten years and has added no value to investors in that time. He calls these…
Diamond Estates Wines and Spirits Inc. (DWS-X)
A leader in alcohol sold in grocery stores in Ontario. They had some problems and had to re-list their products at the LCBO, but this process is now complete. They acquired a vineyard last year and doubled their retail store capacity there.
Wineries around the world damaged by weather Importing wines has cost more, given shortages and inflation for Andrew Peller, but DWS suffers a lot less. During Covid, they did suffer lower sales of course, but with the reopening, they will enjoy strong sales growth. DWS made two recent acquisitions in Ontario wine and Ontario cider.…
Andrew Peller (ADW.A-T)
The second biggest wine company in Canada. Sales in grocery stores are a big prospect for them where grocery stores are being encouraged to carry wine. They have a strong management team and investors should start seeing benefits of investing in brands.
(A Top Pick Apr 28/21, Down 32%) Beverages had a good run during Covid as consumers stocked up. Peller saw good growth, even though some areas of Canada were shut down. But import costs have risen, so margins have declined in the last few quarters. The good news is that travel and restaurants are reopening--and…
Diageo PLC (DEO-N)
The world’s larest alcoholic beverage company. A very well run company with strong brands. The U.S. is their most successful market. They are generating a lot of free cash flow. More of a dividend play.
#1 player globally. Focused on higher-end brands in all of the sectors they're in. So they can charge more, and their margins are growing. Spirits are gaining space on the shelf. Organic growth of 4-5%. Beverages are all about distribution, and they have the best. No one like them in the sector. Dividends grow over…
One of the largest American spirits and wine company. Their brands include Jack Daniels and Finlandia. They have shown consistent results and have been chronically undervalued.
(Top Pick May 18/17, Down 8.22%) It was interesting at the time. There was speculation they would be bought out. He bought it because he liked the company regardless. The stock came back down to normal. He would not buy it because of speculation it would be bought out. He would not change his mind…
Constellation Brands Inc (STZ-N)
A multinational alcohol producer that has major stakes in WEED-T. They are valued fairly and is an excellent defensive stock in consumer staples. They have stable income from a wide range of alcohol brands under them, including Corona.
They delivered a nice revenues beat, but earnings took a hit like many companies due to supply shortages, but manages raised their earnings forecast for the current fiscal year. It's cheap at 18x earnings and well-run.