12 Best Brewery Stocks to Buy According to Hedge Funds

4. Molson Coors Beverage Company (NYSE:TAP)

Number of Hedge Fund Holders: 34

Molson Coors Beverage Company (NYSE:TAP) is a global beverage and brewing giant with a diverse portfolio that includes a variety of beer brands, spirits, and non-alcoholic beverages. With a 4.4% share of the global beer production, Molson Coors is the 5th-largest brewer in the world. The company’s diversified portfolio includes a wide selection of beers in multiple price categories, going from core brands like Coors Light and Miller Light, premium brands like Madri and Blue Moon, right down to economy brands like Miller Higher Life, Keystone, and Icehouse.

Molson Coors Beverage Company (NYSE:TAP) was among the top gainers from the Bud Light controversy last year but those gains seem to be coming to an end. The company had a tough Q3 2024 as net sales declined 7.8% YoY to reach $3.04 billion, missing the analysts’ estimates by over $89 million. Its US financial volume also dropped by 17.9%. However, the beer producer’s core brands remain healthy. According to Circana, in the US, Coors Light, Miller Lite, and Coors Banquet retained a substantial portion of their combined volume share gains in Q3 versus a year ago, when we saw strong share increases. It must also be kept in mind that Molson Coors has consistently increased its revenue over the last 4 years, from $9.65 billion in 2020 to $11.7 billion in 2023, while the Bud Light controversy only happened last year.

Molson Coors Beverage Company (NYSE:TAP) recognizes changing consumer preferences and the challenges faced by the global beer landscape. As such, it has undertaken several strategic initiatives to reshape its brand portfolio and focus on higher-margin segments. These include the divestiture of some of its craft beer brands and the active investments in its premium Beyond Beer portfolio. One such example is the company’s acquisition of the cult favorite high-end Bourbon and rye whiskey brand, Blue Run Spirits, last year.

Molson Coors Beverage Company (NYSE:TAP) also offers a fair dividend yield and has been active in share buybacks, resulting in a shareholder yield of approximately 6% if maintained. The company generated $856 million in underlying free cash flow for the first nine months of 2024 while investing meaningfully in its business and returning $717 million in cash to shareholders through both dividends and share repurchases. While TAP may not be a high-growth stock, it positions itself as a defensive investment that could perform relatively well during economic downturns.