3 best alcohol stocks to watch now as high inflation continues  

By:
on May 6, 2024
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  • The weather is warmer and the cost of living is higher - both can historically be good for alcohol stocks.
  • But which are the best performing alcohol stocks now?
  • We look into the top three most resilient alcohol stocks to watch now, in our opinion.

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It is earnings season currently, and companies across the board are showing results dampened by the fact that inflation is still stickier in the US, with the prospect of interest rate cuts receding further with every month’s data.

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Alcohol brands are known to be resilient, ‘defensive’ stocks, even in challenging environments with high inflation and lower economic growth. This is certainly one reason – along with a penchant for regular and generous dividends – that makes investors choose them.

But many alcohol stocks have been under pressure too. The stock price of major liquor player and maker of Guinness, Diageo, for instance, is down almost 25% in the past year. So, it makes sense to be sober-minded when choosing which alcohol stock to back.

Here are our top three picks for alcohol stocks you may want to watch closely for summer 2024:

  1. Heineken
  2. Constellation Brands
  3. LVMH

1. Heineken

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Founded all the way back in the 1800s in the Netherlands by Gerhard Heineken, this globally known beer maker’s iconic green bottles are a mainstay around the world.

Heineken’s stock price has been more resilient than many alcohol brands in 2024 so far, up 3.81% this month, and down only 0.7% this year to date so far.

And it may get far better for Heineken soon. Summer is coming to most of the world’s main economies in less than a month, and traditionally beers are known to do better in these warmer months of more outdoor socializing than liquors, which generally trade better during the festive season and its colder climate.

Also, under its Star Pubs operation, the company recently announced that it intends to reopen and refurbish more than 600 of its pubs in the United Kingdom in a £39 million investment plan.

2. Constellation Brands

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Constellation Brands is the maker of beers Corona and Modelo, among many other beers, wines and spirits.

On April 11th, Constellation reported in its Q4 2023 results that the company had exceeded fiscal 2024 EPS outlook as its beer business outperformed growth expectations. These included a 11% rise in operating income and a 5% rise in net sales for the year, and a fiscal 2025 Earnings Per Share Outlook of $13.40 to $13.70 per share.

And that’s not all. Constellation shares have done well compared to most of the alcohol business lately. Its stock price is up more than 5% this year to date. In fact, in the past 12 months, Constellation’s share price has risen 12%.

3. LVMH

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You may not initially realize that LVMH – the luxury supergroup perhaps best known for fashion brands like Louis Vuitton and Dior – is an alcohol stock. But it is also owner of some of the most exclusive champagne and brandy names in the world, including Hennesy, Moët and Veuve Clicquot.  

The brand is sure to be top of mind at the Summer Olympics in Paris this year, with LVMH having announced last year that the company will be sponsoring the event, as well as supplying Chaumet medals and Moët Hennessy wine for the winners.

It also helps that the LVMH share price has had a decent run recently. LVMH is up 8.05% this year to date so far.

With that being said, LVMH’s alcohol business, for all its prestige, has been having a more difficult time lately. Although LVMH reported 3% organic revenue growth on the whole, its wine and spirits section showed a 12% decline in revenues in its latest financial results.

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