5 Best Alcohol Stocks to Consider in 2024 | The Motley Fool (2024)

When human civilization dawned, alcohol was discovered not long after. Given its age, the global alcohol industry is hardly a fast-growing investment. However, through good economic times and bad, alcohol stocks enjoy steady rates of consumer consumption.

The alcohol industry, as well as the related beer industry, is dominated by massive conglomerates. This is a market mostly devoid of small, fast-growing publicly traded companies since most small-batch craft producers are privately owned. Nevertheless, for investors seeking stable growth and dividend income over time, alcohol stocks are worth considering.

5 Best Alcohol Stocks to Consider in 2024 | The Motley Fool (1)

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Investing in top alcohol stocks in 2024

Alcohol is a big business. It overlaps some with the water utility segment of the economy since the alcohol-distilling process consumes a significant amount of local water supplies. But when it comes to slow but steady beverage businesses, alcohol tends to enjoy stable sales even when general consumer spending takes a hit elsewhere. Sometimes, alcohol sales even increase when the economy takes a turn for the worst, as they have during the COVID-19 pandemic.

There is some overlap with the beer-making business, too. For example, Budweiser parent AB InBev (BUD -0.35%), as well as smaller peers Constellation Brands (STZ 1.13%), which makes Corona and Modelo, and Boston Beer Company (SAM -0.19%), which produces Samuel Adams, all own brands that lie outside of their core brewing operations.

However, the following five stocks to consider for 2021 focus more squarely on alcohol production, and they're known for their top-shelf production.

Market cap as of January 24, 2023. Data source: YCharts.
CompanyMarket CapDescription
LVMH Moët Hennessy Louis Vuitton (OTC:LVMUY)$432.3 billionA house of fashion and the owner of high-end champagne and distilled spirits brands.
Diageo (NYSE:DEO)$104.6 billionBritain's largest distiller and one of the world's largest alcohol business pure plays.
Pernod Ricard (OTC:PDRDY)$54.1 billionA French company with a diversified stable of alcohol, including vodka, whiskey, and gin.
Brown-Forman (NYSE:BF.B)$32.0 billionKentucky-based distiller best-known for its whiskey, but it owns plenty of other alcohol labels as well.
Rémy Cointreau (OTC:REMY.Y)$9.7 billionAnother French owner of various spirits, especially cognac.

1. LVMH Moët Hennessy Louis Vuitton

France's LVMH Moët Hennessy Louis Vuitton is the premier name in all things luxury goods. But champagne and other ultra-high-end spirits feature prominently in this diverse portfolio of high fashion. In fact, the company's name says as much. LVMH owns champagne house Moët Chandon, cognac maker Hennessy, and other brands, including Dom Pérignon, Krug, Veuve Clicquot, and more.

LVMH -- whose CEO, Bernard Arnault, is the richest person in the world as of August 2021 -- reported a decline in sales during the pandemic in 2020. Wine and spirits in particular took a 15% hit compared to 2019 sales. The segment is roaring back to life, though, as the economy starts to recover and spending on luxury products normalizes.

This is a long-term growth business since its collection of fashion is highly sought after the world over. However, LVMH also pays a modest dividend to complement the steady expansion of its portfolio of fashion and champagne.

2. Diageo

Diageo is the U.K.'s largest alcohol producer. It's also one of the largest businesses in the world almost solely devoted to distilled products. Although it has a beer business -- with Irish brewer Guinness being one of its subsidiaries -- Scotch whisky is the real breadwinner here. Diageo is the parent of Johnnie Walker, Buchanan's, J&B, and Lagavulin. Outside of its ample whisky business, other spirits brands include Smirnoff, Baileys, and Tanqueray.

It's an enviable stable of alcohol names, and Diageo has been able to coax steady growth from its portfolio for years. It's also a highly profitable operation, historically generating an operating profit margin upwards of 30% per year. As a result, this is a top dividend income stock to consider from the alcohol stock universe.

3. Pernod Ricard

Pernod Ricard is another house of alcohol brands tailored to wide-ranging tastes. The French firm owns Pernod and Ricard, two anise-flavored liqueurs from which the company's name is derived, as well as Absolut, Beefeater, Chivas Regal, Jameson, Kahlua, Malibu, and many other labels.

Much like the other brands on this list, Pernod Ricard isn't the fastest growing business around. Revenue is recovering from a small pullback in 2020 when sales briefly dipped during the start of the pandemic. Nevertheless, Pernod Ricard is nearly back to where it was in 2019 and also has enviable operating profit margins nearing the 30% range.

4. Brown-Forman

While Kentucky-based Brown-Forman had its share of difficulties during the start of the pandemic, the leading maker of Tennessee and Kentucky whiskeys has enjoyed an overall increase in sales the past year and a half. This is a top growth story in the alcohol world as bourbon and whiskey have been trending beverages among consumers of all ages in the U.S. and abroad the past few years.

Brown-Forman's whiskey brands include Jack Daniel's, Woodford Reserve, and Old Forester. It also owns a few Scotch whisky and tequila labels, Finlandia vodka, Chambord liqueur, some wineries, and more. It generates operating margins well above 30%, which it uses to reinvest in organic growth and to make the occasional acquisition. It also pays a small dividend for those investors looking for a little income along the way.

5. Rémy Cointreau

Rounding out our list of alcohol stocks is another French company, Rémy Cointreau, best known for its cognacs Louis XIII and Rémy Martin and Cointreau, an orange-flavored liqueur. A number of other distilled products such as gin and rum and a champagne house round out the company's offerings.

Despite a brief sales freeze in the spring of 2020 during the initial wave of lockdowns, Rémy Cointreau reported a slight uptick in sales last year, including its divested joint venture with Passoã liqueur in late 2020. It's enjoying strong growth this year as the economic effects of the pandemic ease. The company is working on fostering growth in its portfolio by elevating its brands' profile as a premium choice.

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A slow but steady industry

Alcohol production is an old business, and the alcohol industry is far from the fastest-growing segment of the stock market. The investible portion of the industry is dominated by a few giants that are slow but steady stalwarts. However, for investors looking to generate some income and enjoy some stable returns over time, alcohol stocks, as well as their beer stock cousins, are worth a look.

Nicholas Rossolillo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boston Beer and Constellation Brands. The Motley Fool recommends Diageo Plc. The Motley Fool has a disclosure policy.

I am an expert and enthusiast-based assistant. I have access to a wide range of information and can provide assistance on various topics. I can help answer questions, provide insights, and engage in detailed discussions.

Regarding the concepts used in the article you provided, let's discuss them one by one:

Alcohol Industry:

The global alcohol industry is an established sector that has been around for a long time. It is not known for its fast growth, but it has shown steady rates of consumer consumption even during economic downturns. The industry is dominated by large conglomerates, and there are few small, publicly traded companies in this market. Most craft producers are privately owned. However, for investors seeking stable growth and dividend income over time, alcohol stocks can be worth considering.

Alcohol Stocks:

Investing in alcohol stocks can be an option for those looking for stable returns and dividend income. The article mentions five alcohol stocks to consider in 2021:

  1. LVMH Moët Hennessy Louis Vuitton: LVMH is a French company known for its luxury goods. It owns high-end champagne and distilled spirits brands such as Moët Chandon, Hennessy, Dom Pérignon, and Krug.

  2. Diageo: Diageo is the largest alcohol producer in the UK and one of the largest in the world. It specializes in distilled products, with Scotch whisky being a significant part of its portfolio. It also owns brands like Johnnie Walker, Smirnoff, and Baileys.

  3. Pernod Ricard: Pernod Ricard is a French company with a diverse range of alcohol brands. It owns Pernod and Ricard liqueurs, as well as Absolut, Chivas Regal, Jameson, and Malibu, among others.

  4. Brown-Forman: Brown-Forman is a Kentucky-based distiller known for its whiskey brands, including Jack Daniel's, Woodford Reserve, and Old Forester. It also owns other alcohol labels, wineries, and more.

  5. Rémy Cointreau: Rémy Cointreau is a French company famous for its cognacs, such as Louis XIII and Rémy Martin, as well as Cointreau liqueur. It also offers other distilled products like gin and rum.

These companies have established brands and are known for their quality products. They have shown steady growth and profitability over the years, making them potential options for investors seeking stability and income.

It's important to note that investing in stocks carries risks, and it's always advisable to do thorough research and consult with a financial advisor before making any investment decisions.

I hope this information helps! Let me know if you have any further questions.

5 Best Alcohol Stocks to Consider in 2024 | The Motley Fool (2024)


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