In this article, we discuss 10 best beverage stocks with dividends. You can skip our detailed analysis of the beverage industry and its outlook, and go directly to read 5 Best Beverage Stocks with Dividends.
Beverage stocks are companies that are primarily engaged in the production, distribution, and sale of beverages. These companies operate in the beverage industry, which encompasses a wide range of products, including soft drinks, alcoholic beverages, coffee, tea, bottled water, energy drinks, and dairy-based beverages.
After a summer of strong spending by American consumers, bars, hotels, and restaurants believe that the period of excessive spending by US consumers following the pandemic is probably over, according to a report by CNN. The Federal Reserve's recent "Beige Book" economic report mentioned that some of the Fed’s regional districts have observed that tourism activity had either reached its highest point or was starting to slow down. This is seen as an indication that consumer spending in the US, which plays a significant role in the country's overall economic activity, might be changing in the upcoming months. One of the main reasons for this slowdown is growing inflation and economic challenges. According to RSM US, consumers are buying store-brand products to save money. Food companies that used to do well by selling high-quality and natural products are now facing challenges because their costs are going up.
However, the industry has experienced rapid growth over the years. According to the Food and Beverages Global Market Report 2023, the global food and beverage industry grew at a CAGR of 7.3% in 2023, reaching 7,221.73 billion. The report further mentioned that the global food and beverages market is expected to grow at a CAGR of 6.3% by 2027.
The food and beverage industry has been experiencing various trends and growth patterns in different segments. In one of the recent developments, the major food companies around the world are making commitments to reduce emissions throughout their entire supply chain, Forbes reported. The report further mentioned that most of the emissions, typically over 90%, come from "Scope 3 emissions." These emissions are not created directly by the company but by the companies they work with, like suppliers, carriers, and partners who help make their products. In the food and beverage industry, farmers play a crucial role as suppliers. If these farmers don't adopt more sustainable practices when growing crops, the big food companies won't be able to meet their goals for reducing carbon emissions.
Investors have increasingly turned their focus to stocks in the ever-evolving food and beverage industry. Though the S&P Food & Beverage Select Industry Index is underperforming the broader market this year, major beverage stocks are producing positive returns for shareholders. Companies like PepsiCo, Inc. (NASDAQ:PEP), The Coca-Cola Company (NYSE:KO), and Starbucks Corporation (NASDAQ:SBUX) are some of the best beverage stocks among investors because they pay dividends to shareholders. In this article, we will further discuss beverage stocks to invest in.
10 Best Beverage Stocks with Dividends
Photo by Gio Bartlett on Unsplash
Our Methodology:
To select the best beverage stocks, we scanned Insider Monkey's database of 910 hedge funds and picked companies that are primarily involved in the production and distribution of a wide variety of liquid refreshments, including soft drinks, alcoholic beverages, coffee, tea, bottled water, energy drinks, fruit juices, sports and nutritional drinks, and dairy-based beverages. From that list, we selected companies that pay dividends to shareholders and ranked them in ascending order of the number of hedge funds having stakes in them as of Q2 2023.
Diageo plc (NYSE:DEO) is a multinational beverage company that is headquartered in London, United Kingdom. It is one of the world's largest producers of alcoholic beverages and operates in various segments of the alcoholic drinks market. The company offers a semi-annual dividend of $2.5088 per share and has a dividend yield of 2.65%, as of September 25.
In addition to Diageo plc (NYSE:DEO), PepsiCo, Inc. (NASDAQ:PEP), The Coca-Cola Company (NYSE:KO), and Starbucks Corporation (NASDAQ:SBUX) are some other best beverage stocks with dividends to consider.
At the end of Q2 2023, 25 hedge funds tracked by Insider Monkey reported having stakes in Diageo plc (NYSE:DEO), up from 23 in the previous quarter. The collective value of these stakes is over $428.6 million. With over 1.3 million shares, Markel Gayner Asset Management was the company's leading stakeholder in Q2.
9. Brown-Forman Corporation (NYSE:BF-B)
Number of Hedge Fund Holders: 30
Brown-Forman Corporation (NYSE:BF-B) is an American multinational corporation that is primarily known for its production and distribution of alcoholic beverages, with a focus on premium and super-premium brands. In its recently announced fiscal Q1 2024 earnings, the company posted revenue of $1.04 billion, which showed a 3% growth from the same period last year. It ended the quarter with over $426 million available in cash and cash equivalents and generated $38 million in operating cash flow.
Brown-Forman Corporation (NYSE:BF-B), one of the best beverage stocks to buy, currently pays a quarterly dividend of $0.2055 per share and has a dividend yield of 1.37%, as of September 25. The company has a 79-run of paying regular dividends to shareholders while maintaining a 39-year streak of consistent dividend growth.
As of the close of Q2 2023, 30 hedge funds in Insider Monkey's database reported having stakes in Brown-Forman Corporation (NYSE:BF-B), compared with 29 a quarter earlier. The collective value of these stakes is over $1.477 billion. Among these hedge funds, Fundsmith LLP was the company's largest stakeholder in Q2.
Archer-Daniels-Midland Company (NYSE:ADM) is a global food processing and commodities trading corporation. Though the company cannot be taken as a typical beverage corporation, it supplies ingredients that might be used in beverages, such as sweeteners, flavors, and textures. On August 2, the company declared a quarterly dividend of $0.45 per share, which was in line with its previous dividend. It has been growing its dividends consistently for the past 50 years, which makes it one of the best beverage stocks with dividends. The stock's dividend yield on September 25 came in at 2.33%.
In the second quarter of 2023, Archer-Daniels-Midland Company (NYSE:ADM) reported a strong cash position with over $1.4 billion available in cash and cash equivalents, up from $906 million in the prior year period. The company's operating cash flow for six months that ended June 2023 came in at roughly $900 million.
Insider Monkey's database of 910 hedge funds indicated that 32 funds owned stakes in Archer-Daniels-Midland Company (NYSE:ADM) at the end of Q2 2023, down from 39 in the previous quarter. The consolidated value of these stakes is over $676 million. With over 2 million shares, AQR Capital Management was the company's leading stakeholder in Q2.
The Kraft Heinz Company (NASDAQ:KHC) is next on our list of the best beverage stocks with dividends. The company is one of the largest food and beverage manufacturers in the world and operates in various segments within the food industry. It currently pays a quarterly dividend of $0.40 per share for a dividend yield of 4.66%, as recorded on September 25. The company has been paying regular dividends to shareholders since its merger in 2015.
The Kraft Heinz Company (NASDAQ:KHC) generated $6.7 billion in revenues in the second quarter of 2023, which showed a 2.6% growth from the same period last year. Year-to-date its operating cash flow jumped by 101% year-over-year to $1.6 billion and free cash flow grew by 205.8% to $1.1 billion.
Warren Buffett's Berkshire Hathaway was the largest stakeholder of The Kraft Heinz Company (NASDAQ:KHC) at the end of Q2 2023. Overall, 39 hedge funds in Insider Monkey's database reported having stakes in the company in the most recent quarter, up from 34 a quarter earlier. Their collective stake value is over $12.2 billion.
Molson Coors Beverage Company (NYSE:TAP) is a multinational beverage company that operates in the alcoholic and non-alcoholic beverage sectors. It ranks sixth on our list of the best beverage stocks with dividends. The company offers a quarterly dividend of $0.41 per share and has a dividend yield of 2.61%, as of September 25.
PepsiCo, Inc. (NASDAQ:PEP), The Coca-Cola Company (NYSE:KO), and Starbucks Corporation (NASDAQ:SBUX) are some other beverage stocks popular among shareholders due to their strong dividends.
In the second quarter of 2023, Molson Coors Beverage Company (NYSE:TAP) reported revenue of $3.27 billion, which showed a 12% growth from the same period last year. In the first six months of the year, the company generated $894.4 million in operating cash flow and its free cash flow for the period came in at roughly $570 million.
Molson Coors Beverage Company (NYSE:TAP) was a popular stock among hedge funds with elite funds' positions jumping to 40 at the end of Q2 2023, from 30 in the previous quarter, as per Insider Monkey's database. The total value of these stakes is over $1.1 billion. With over 3.7 million shares, Citadel Investment Group was the company's largest stakeholder in Q2.
