5 Best Beverage Stocks To Buy Now

Below we presented the list of 10 best beverage stocks to buy now. For a detailed discussion on our investment thesis, future growth outlook for the beverage industry and catalysts, see the 10 Best Beverage Stocks to Buy Now.

Kraft Heinz Co (NASDAQ: KHC) is an Illinois-based company that makes several beverage products including coffee, juices and flavored nutritional drinks. According to a latest report by Nielsen, Kraft Heinz was one of the top food and beverage companies that posted solid sales growth in the four-week period ending Dec.12. Kraft reported a sales growth of over 10% in the period.

Of the 816 elite hedge funds tracked by Insider Monkey, 39 held stakes in Kraft Heinz as of the end of the September quarter. The total worth of these stakes is $10.1 billion. Among these hedge funds is Warren Buffett’s Berkshire Hathaway, which owns 325,634,818 shares of the company worth $9.75 billion. Aswath Damodarand was critical of Warren Buffett and KHC in this 2019 article.

4. Keurig Dr Pepper Inc

Keurig Dr Pepper Inc (NASDAQ: KDP) ranks 3rd on the list of 10 best beverage stocks to buy now. Keurig is a Texas-based beverage company that makes iced tea, juices, hard seltzer products and coffee products. In December 2020, UBS analyst Sean King initiated the coverage of Keurig Dr Pepper with a Buy rating. The analyst believes that the stock has a major upside potential and gave a price target of $32. For the third quarter, the company reported an adjust EPS of $0.39, above the analysts’ estimate of $0.37.

Hedge funds interest in Keurig Dr Pepper jumped significantly in the third quarter. A total of 41 hedge funds held stakes in the company by the end of the quarter, up from just 29 funds in the previous quarter. The total worth of these stakes is over $1.21 billion.  Natixis Global Asset Management’s Harris Associates is leading these hedge funds, with a stake worth $485.05 million. Oakmark Funds talked about KDP in its 2020 Q3 investor letter:

“Keurig Dr Pepper is one of North America’s leading beverage companies and commands dominant positions in single-serve coffee and flavored sodas. We believe single-serve coffee pods will capture almost all of the incremental growth in at-home coffee consumption because coffee drinkers increasingly prefer K-Cups over drip brewing due to its greater convenience, quality, variety and value. Keurig’s competitive advantages (low-cost production, the largest installed base of brewers, exclusive brand partnerships) allow it to collect a toll on most pods sold in North America. The company’s soda franchises remain highly profitable, and we do not expect health-related concerns about sugar to materially impact consumption trends. We believe that Keurig’s brands should deliver steady growth, consistent market share gains and significant excess cash. We think the company is an above-average business trading at a meaningful discount to the broader market, its beverage peers and historical private market transactions.”

Illinois-based MONDELEZ INTERNATIONAL INC Common Stock (NASDAQ: MDLZ) is mostly known for its food products, including Cadbury chocolate and Oreo cookies, but the company also makes beverages such as Tang and Bournvita. In the third quarter, Mondelez reported a 4.4% rise in organic sales, versus a 2.6% growth estimate.  Operating margin came in at 17.5%, crushing the Street’s estimate of 16.6%.

The company earned $0.63 per share in the quarter, while revenue in the period came in at $6.67 billion, ahead of the $6.48 billion estimates.

A total of 50 hedge funds tracked by Insider Monkey reported owning stakes in Mondelez as of the end of the third quarter. The total worth of these stakes is $2.67 billion.  Among these hedge funds is legendary investor and billionaire Ray Dalio of Bridgewater Associates, who bought 686,216 shares in the company, worth $39.42 million.

Donald Yacktman’s Yacktman Asset Management is one of the 52 hedge funds in our database that had stakes in  PepsiCo, Inc. (NASDAQ: PEP) as of the end of the September quarter. The fund owns 3,304,176 shares of the company, worth $457.96 million.

Wells Fargo on Dec. 8 said that it is in a wait-and-see mode when it comes to Pepsi, as investors need to see confirmed signs of growth for the company. The firm, which has an Equal Weight rating and $157 price target for the beverage stock, said that Pepsi is expected to show organic sales growth just like every year since 2013. However, Wells Fargo believes investors still need signs of a strong growth before turning bullish on the stock.

1. Coca-Cola Co 

Coca-Cola Co (NYSE: KO) is one of the biggest beverage companies in the world, with a market cap of $225 billion. Morgan Stanley analyst Dara Mohsenian recently said in a report that Coca-Cola will be one of the strongest post-COVID growth stories. The analyst has an Overweight rating for the stock. Wells Fargo also gave bullish comments for Coca-Cola stock, with a $62 price target. Wells Fargo analyst Chris Carey said the coronavirus pandemic caused a shift in consumer behaviors, but the demand never fell for Coca-Coca. Carey believes the company will reach back to its pre-pandemic growth levels by 2023.

Coca-Cola tops the 10 best beverage stocks to buy now list, as 60 hedge funds tracked by Insider Monkey are bullish on the stock, as of the end of the third quarter. These funds collectively own about $22 billion worth of Coke stock.

Please also see 10 Best High Dividend Stocks To Buy Now and 10 Best Cheap Stocks To Buy Now.

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