Molson Coors Brewing Company (TAP), BEAM Inc (BEAM): The Liquor Stock Taste Test for Your Portfolio

Investors should be wary of the company’s exposure to Latin America, however. With approximately 90% of sales generated from the region, AmBev is highly exposed to the Latin American economy. That said, Brazil is expected to be among the top 4 fastest-growing economies in the world, which makes it a major factor in that 90% of sales figure. The past few years has been full of turbulence for the nation: while its unemployment rate has spiked to 8.3% (which increased from about 7% 4 years ago), I believe the rapidly rising GDP (see chart below), is a sign of positive things to come.

It should be emphasized that Brazil is a key component in Companhia de Bebidas das Americas (ADR) (NYSE:ABV)’s marketing plan, as it makes up a large portion of one of three pillars, which is the Asia-Pacific/South American side of operations. And with 90% of sales coming from Latin America, Brazil (as one of the Latin nations with the most disposable income) contributes a healthy portion to Companhia de Bebidas das Americas (ADR) (NYSE:ABV)’s sales, though sales percentages to individual nations within Latin America weren’t released. It’s fair to say that with that much of ABV’s  revenue coming from Latin America, much of that is from Brazilian beer drinkers.

Brazil GDP data by YCharts

Deciding what tastes best

Deciding your portfolio’s taste preference depends on its current diversity. For example, if you already hold a Brazilian stock in your portfolio, you likely wouldn’t want to double-up on the nation by investing in AmBev. Similarly, Molson Coors Brewing Company (NYSE:TAP) might not be the company for you if you already have heavy European investments. Finally, while it isn’t as likely, if you have a bourbon company in your portfolio, you should second-guess doubling up by investing in BEAM Inc (NYSE:BEAM). However, each of these companies presents major growth opportunities, and could be just what your portfolio is craving.

The article The Liquor Stock Taste Test for Your Portfolio originally appeared on Fool.com and is written by Phillip Woolgar.

Phillip Woolgar has no position in any stocks mentioned. The Motley Fool recommends Beam and Molson Coors Brewing Company.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.