BEAM Inc (BEAM), Diageo plc (ADR) (DEO), Constellation Brands, Inc. (STZ): An Alcoholic Beverage Company Relying on Expansion and Innovation

It might seem as though all three companies offer quality investment opportunities, but the truth is that the industry tends to trade together for the most part. In most economic environments, all three companies would present quality investment opportunities. However, this isn’t what you would call a normal, or even remotely predictable, economic environment and stock market. The problem is that none of these stocks offer resiliency. Pay attention to the plummeting stock prices in 2008/2009:

BEAM data by YCharts

Some investors might say that we will never see a market drop of that magnitude again, but since anything is possible at any given time, it’s always wise to protect your capital.

Conclusion

BEAM Inc (NYSE:BEAM) is a steady company with justifiable goals. It lacks resiliency, and better investment options might be available. That said, demand for Beam’s products will always exist, and management has done a good job of navigating the company through a challenging economic environment. While downside risks are relatively high for the stock price in the near to medium term, this is a quality company that should reward investors over the long haul. If you initiate a position, strongly consider doing so at a slow and incremental pace.

The article An Alcoholic Beverage Company Relying on Expansion and Innovation originally appeared on Fool.com.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Beam and Diageo plc (NYSE:DEO) (ADR). 

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