7 Best Wine Stocks To Buy Now

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

Number of Hedge Fund Holders: 32

One of the Best Alcohol Stocks According to Hedge Funds, Brown-Forman Corporation (NYSE:BF-B) engages in the production, distillation, bottling, import, export, marketing, and sale of a wide range of alcoholic beverages, with a special emphasis on spirits. This puts the company in a commanding position in the American market where spirits are gaining more and more traction every day.

Brown-Forman announced in May that it had completed the sale of Sonoma‑Cutrer Vineyards and related brand trademarks to The Duckhorn Portfolio, in exchange for an ownership percentage of approximately 21.5% in the premium winemaker and $50 million in cash. When the deal was first announced last year, Lawson Whiting, president and CEO of BF-B, stated:

“Adding Sonoma-Cutrer to The Duckhorn portfolio will enhance one of the most respected wine portfolios in the industry. Moreover, we believe an equity stake in The Duckhorn Portfolio will be a valuable investment for Brown-Forman, allowing us to maintain a presence in the wine category while focusing resources on building our premium and super-premium spirits brands.”

BF’s Jack Daniel’s brand is included among the Most Popular Whiskey Brands in the World and contributes significantly to its revenue. However, the iconic brand has been facing some headwinds recently due to a hike in prices, as consumers look for cheaper alternatives. Sales of Jack Daniel’s Tennessee Whiskey dropped by 6% in Q4 ending April 30th 2024, building on the already 6% sales decline in the previous quarter. As a result, Brown-Forman’s revenue for its fiscal year 2024 declined by over 1% to reach approximately $4.28 billion. This also caused its stock price to plummet by over 20% since the beginning of the year. The company is facing challenges mostly due to a subdued, inflation-driven consumer demand and hence also increasingly cautious retailers and distributors. But this is not something that is unique to Brown-Forman Corporation (NYSE:BF-B), with CEO Lawson Whiting calling fiscal year 2024 ‘a challenging year within the spirits industry.’

There was good news from the Ready-to-Drink (RTD) category though, with sales going up 2% during the year. Moreover, the declines in the US market were largely offset by growth in emerging markets (up 8%) and travel retail (up 6%).

Brown-Forman Corporation (NYSE:BF-B) is a great wine stock for dividends and the company paid $404 million to stockholders through its regular quarterly dividend and returned $400 million to stockholders through its share repurchase program in fiscal year 2024. BF is a member of the prestigious S&P 500 Dividend Aristocrats index and its 10-year compound annual dividend growth rate comes in at 7.86%.