5 Best Beverage Stocks To Buy

In this article, we discuss 5 best beverage stocks to buy. If you want to see more stocks in this selection, check out 10 Best Beverage Stocks To Buy. 

5. Brown-Forman Corporation (NYSE:BF-B)

Number of Hedge Fund Holders: 36

Brown-Forman Corporation (NYSE:BF-B) is engaged in the production, distillation, bottling, import, export, marketing, and sale of a wide range of alcoholic beverages. The company offers an assortment of spirits, wines, whiskey spirits, flavored liqueurs based on whiskey, pre-mixed beverages, cocktails, vodkas, tequilas, champagnes, brandy, bourbons, and liqueurs. Brown-Forman Corporation (NYSE:BF-B) is one of the best beverage stocks to invest in. Due to the ongoing success of its brand portfolio, high consumer demand, and the gradual return of inventories to expected levels, Brown-Forman Corporation (NYSE:BF-B) anticipates organic net sales growth within the range of 8% to 10% in FY 2023. 

On March 20, Deutsche Bank maintained a Hold rating on Brown-Forman Corporation (NYSE:BF-B) and revised down the price target for the shares from $70 to $65. The analyst expressed growing concerns about potential economic challenges that could impact the consumer staples sector. This heightened risk perception raises apprehensions regarding the future company fundamentals across a significant portion of Deutsche Bank’s coverage.

According to Insider Monkey’s fourth quarter database, 36 hedge funds were long Brown-Forman Corporation (NYSE:BF-B), and Terry Smith’s Fundsmith LLP is the largest stakeholder of the company, with 12 million shares worth $798 million. 

4. Constellation Brands, Inc. (NYSE:STZ)

Number of Hedge Fund Holders: 42

Constellation Brands, Inc. (NYSE:STZ) and its affiliated companies are involved in the production, importation, marketing, and sale of beer, wine, and spirits across multiple countries including the United States, Canada, Mexico, New Zealand, and Italy. On April 6, Constellation Brands, Inc. (NYSE:STZ) declared a $0.89 per share quarterly dividend, an 11.3% increase from its prior dividend of $0.80. The dividend is distributable on May 18, to shareholders of record on May 4. 

On April 10, Peter Grom, an analyst at UBS, increased the price target for Constellation Brands, Inc. (NYSE:STZ) from $267 to $280 while maintaining a Buy rating on the company’s shares. In a research note to investors, the analyst described Constellation Brands, Inc. (NYSE:STZ)’s performance as a “solid” beat, with the beer division delivering better-than-anticipated results. Despite some concerns regarding weaker Q4 depletions, Grom believes that the overall performance and outlook are positive. However, the analyst noted that these positive developments may not completely address concerns about the future growth trajectory of the beer business.

According to Insider Monkey’s fourth quarter database, 42 hedge funds were bullish on Constellation Brands, Inc. (NYSE:STZ), compared to 43 funds in the earlier quarter. D E Shaw is the biggest stakeholder of the company, with 579,915 shares worth $134.4 million. 

3. Monster Beverage Corporation (NASDAQ:MNST)

Number of Hedge Fund Holders: 44

Monster Beverage Corporation (NASDAQ:MNST) is involved in the creation, promotion, sales, and global distribution of energy drink beverages and concentrates. The organization is divided into three main divisions – Finished Product, Concentrate, and Other, each handling distinct aspects of its operations. 

On April 3, Stifel analyst Mark Astrachan revised the firm’s price target for Monster Beverage Corporation (NASDAQ:MNST), lowering it from $113 to $61. This adjustment takes into account updated estimates and the completion of a 2-for-1 stock split on March 28. Despite the target adjustment, Astrachan maintained a Buy rating on the company’s shares. According to court documents, Bang, a competitor that filed for bankruptcy in October 2022, intends to sell its business. Stifel suggests that Monster Beverage Corporation (NASDAQ:MNST) is well-positioned to acquire Bang and it would have a positive impact on Monster’s earnings per share, contribute to its presence on retail shelves, and provide additional manufacturing options within the United States.

According to Insider Monkey’s fourth quarter database, 44 hedge funds were bullish on Monster Beverage Corporation (NASDAQ:MNST), compared to 39 funds in the prior quarter. Neal C. Bradsher’s Broadwood Capital is the biggest stakeholder of the company, with 4.65 million shares worth $427.8 million. 

Here is what Carillon Tower Advisers specifically said about Monster Beverage Corporation (NASDAQ:MNST) in its Q2 2022 investor letter:

“Monster Beverage Corporation (NASDAQ:MNST) develops and sells energy drinks and concentrates. The company’s shares outperformed, driven by an impressive earnings report highlighted by better than expected organic growth. Management also gave guidance that indicated a potential bottom in gross margins, as well as upcoming price increases that helped give investors confidence in its growth outlook.”

2. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 58

The Coca-Cola Company (NYSE:KO) is one of the best beverage stocks to invest in. The company provides sparkling soft drinks, sparkling flavors, water, sports, coffee, tea, juice, value-added dairy, and plant-based beverages. On April 26, The Coca-Cola Company (NYSE:KO) declared a quarterly dividend of $0.46 per share, in line with previous. The dividend is payable on July 3, to shareholders of record on June 16. 

On April 26, Barclays increased its price target for The Coca-Cola Company (NYSE:KO) from $72 to $73. The firm also maintained an Overweight rating on the company’s shares, noting that the company had a promising beginning to 2023, surpassing profit expectations in the first quarter.

According to Insider Monkey’s fourth quarter database, 58 hedge funds were bullish on The Coca-Cola Company (NYSE:KO), compared to 59 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the biggest stakeholder of the company, with 400 million shares worth $25.4 billion. 

Rowan Street Capital mentioned The Coca-Cola Company (NYSE:KO) in its Q4 2022 investor letter. Here is what the firm has to say:

“Let’s take The Coca-Cola Company (NYSE:KO) for example. Its dividend yield is 2.8%, earnings are estimated to grow at only 3.6% rate per year over next 4 years, and its earnings multiple is currently at 24x (based on next years forecasted earnings). KO has an anemic growth, so we can argue that paying 24x earnings is not very attractive. Let’s assume that the multiple will stay constant over the next 3-5 years, thus our expected annual returns will be 2.8%+3.6% = 6.4% (that is below the current reported inflation rate and only slightly above the risk-free rate of 4%).”

1. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 70

PepsiCo, Inc. (NASDAQ:PEP) manufactures, markets, and sells various beverages and convenient foods worldwide. It is one of the premier beverage stocks to invest in. On April 25, PepsiCo, Inc. (NASDAQ:PEP) reported a Q1 non-GAAP EPS of $1.50 and a revenue of $17.85 billion, outperforming Wall Street estimates by $0.11 and $580 million, respectively. 

On April 27, Barclays raised the firm’s price target on PepsiCo, Inc. (NASDAQ:PEP) to $206 from $201 and kept an Overweight rating on the shares. In a research note to investors, the firm highlighted that PepsiCo, with its first-quarter performance, has revised its projections for organic sales and core profit growth, indicating positive outlook and potential for growth.

According to Insider Monkey’s fourth quarter database, 70 hedge funds were bullish on PepsiCo, Inc. (NASDAQ:PEP), compared to 72 funds in the prior quarter. Terry Smith’s Fundsmith LLP is the biggest stakeholder of the company, with 6.65 million shares worth $1.20 billion. 

Madison Sustainable Equity Fund made the following comment about PepsiCo, Inc. (NASDAQ:PEP) in its Q1 2023 investor letter:

“PepsiCo, Inc. (NASDAQ:PEP) announced that it will commit $3.3 million in funds toward water replenishment projects across North America. These projects aim to reduce absolute water use and replenish back into the local watershed more than 100% of the water used at company-owned and third-part sites in high water-risk areas.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out 12 Gene Editing Stocks With the Best Long-Term Potential and Top 20 Companies in Pakistan.