Market volatility has been intensifying lately amid increasing geopolitical tensions and Fed’s reiterated aggressive hawkish stance. However, the majority of wine and alcohol stocks have persevered, thanks to the inelastic demand for these products. As average alcohol consumption tends to rise during periods of economic slowdown, big-brand companies expect their sales and bottom line to rise in the upcoming quarters. This potential move comes as the U.S. stares down a possible recession while macroeconomic headwinds pile up.
Top Picks for 2022
Diageo plc (NYSE: DEO)
With brands such as Johnnie Walker, Smirnoff and Don Julio in its pipeline, DEO is one of the largest alcohol companies in the world. Headquartered in London, the company has an international market presence and operations across 132 sites globally.
Analysts expect DEO’s annual revenues to rise 9.38% year-over-year in fiscal 2023. In addition, the company’s earnings per share (EPS) is expected to rise in double digits through 2024. DEO raised its annual dividend by 5% to 0.4682 pounds last month, making it a potentially smart buy.
LVMH Moet Hennessy Louis Vuitton ADR (OTCMKTS: LVMUY)
The Paris-based luxury goods company also has a fine wine vertical. With renowned blue-chip Bordeaux Château Cheval Blanc, Moët & Chandon and Dom Pérignon, LVMUY is one of the best ADRs you can invest in. In fact, the stock is up 8.97% over the past month, outperforming the benchmark S&P 500 index’s 6.74% returns over this period.
Boston Beer Company Inc. (NYSE: SAM)
SAM is the second largest brewing company in the United States, per its 2021 sales volume. Its popular brands include Samuel Adams Boston Lager and Truly Hard Seltzer. As social distancing restrictions and mask mandates phase out, the demand for beer has been on the rise. Though the declining demand for hard seltzers has caused the company to downgrade its earnings guidance, analysts expect SAM’s revenues to rise substantially year-over-year in the upcoming quarters.
Related News Highlights in Alternative Investments
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The securitized wine investment platform Vint is launching its largest offering to date this month – Bordeaux En Primeur 2021 Collection at $50 per share. Merlot yields in the Bordeaux region were impacted by cold temperatures and early frost in 2021, leading to lower volumes and higher demand for the vintage.
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