Beer stocks are what a lot of people call sin stocks. For those who are curious, sin stocks are exactly what they sound like, which is to say, the stocks of companies in a line of business that is seen as being sinful for some reason by a significant number of people. Beer stocks are an excellent example of sin stocks, but other examples can range from gambling stocks to gun stocks because different people tend to see different things as being bad in an ethical sense.
Regardless, while beer stocks are often seen as being bad in an ethical sense, that doesn’t necessarily mean that they are bad in a financial sense. In fact, there are people who believe that sin stocks might actually make for better investments than most of their counterparts out there for a number of reasons.
First, this is because sin stocks are often businesses with rather inelastic demand in the sense that their customers tend to make either the same purchases or similar purchases even when circumstances change. After all, while people are capable of something such as stopping their consumption of tobacco, that tends to be a rather challenging process, meaning that their demand for cigarettes and other tobacco-based products can’t change all of a sudden. As a result, sin stocks are better-insulated from bad economic times than most of their counterparts, which can make them welcome to those who are cautious about such occurrences.
Second, sin stocks tend to fall into industries with a fair amount of rules and regulations regarding what they can and cannot do. As a result, this discourages people who might otherwise be interested in entering said industries, thus decreasing the number of competitors in their chosen market. This might be a bad thing for the customers for said market, but for the shareholders, this can be an excellent thing because less competition can mean more profit as well as bigger profit margins for said companies, which in turn, mean more lucrative stocks for shareholders.
Third, sin stocks are called thus because they are considered sinful. As a result, there are a lot of people out there who don’t like them for ethical reasons, which in turn, means that there are a lot of people who will never consider buying them. For people who don’t care about this particular issue, this can mean that sin stocks are undervalued, meaning that more value can be had for less spending. However, it is important to note that this is by no means a universal truth.
Here are five beer stocks that interested individuals might want to take a look at:
Anheuser-Busch InBev SA/NV
Anheuser-Busch InBev SA/NV merits a mention because it is one of the true titans of the beer industry. People in the United States should be familiar with it because of Budweiser. However, it is important to note that the company doesn’t just control something like half of the U.S. market but also close to a third of the world market as well, thus making it the biggest beer company in the world.
Technically, Ball Corporation isn’t a beer company. Instead, it makes beverage cans and other metal packaging products for beer companies and other companies in other industries. Recently, Ball Corporation swallowed up a UK-based competitor, which has provided it with an even stronger position in a very competitive market.
Constellation Brands, Inc.
Constellation Brands handles a couple of well-known beer brands in the form of Corona and Modelo. However, it is also well-known because of its wine brands, which also contribute a fair amount to its annual earnings. Curiously, Constellation Brands has been taking an interest in the marijuana industry in Canada as well, which has been showing a fair amount of promise in recent times because of recent legalization efforts.
Craft Brew Alliance, Inc.
Craft beer has been becoming more and more popular in recent times. As a result, it makes sense to look into craft brewing companies. Like its name suggests, Craft Brewing Alliance is a company that specializes in bringing craft beer brands to market, meaning that while it is small compared to some of the other names here, it has potential.
Molson Coors Brewing Company
Molson Coors is an excellent example of a well-established beer company with solid earnings. Primarily, it gets its sales from Canada. However, it has other markets in both the United Kingdom and Eastern Europe, which are in addition to a small number of sales in the United States. It has had decent performances in recent years, thus making it worth taking a longer look.