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2020-08-10 00:00:00 UTC
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The Man Behind Jack Daniel’s
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https://www.nasdaq.com/articles/the-man-behind-jack-daniels-2020-08-10
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In this episode of MarketFoolery, Chris Hill chats with Fawn Weaver, CEO and co-founder of Uncle Nearest Premium Whiskey, about one of America's most recognized whiskey brands. Discover the true story of the man behind the iconic whiskey and how his legacy is being preserved through Uncle Nearest. Fawn also talks about her company, its operations, its future direction, and much more.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on August 5, 2020.
Chris Hill: It's Wednesday, August 5th. Welcome to MarketFoolery. I'm Chris Hill, thanks for listening. Let me start with a quick programming note. It is a short week here at MarketFoolery. As I said on Monday, I'm actually away this week, so this is going to be the last episode for this week. And if you're thinking, Hey, what am I supposed to do on Thursday? What about Industry Focus? What about Rule Breaker Investing with David Gardner? What about Motley Fool Answers, closing in on its 300th episode of all time? By all means, if you haven't already, check out some of the other podcasts from The Motley Fool.
With that out of the way, let me talk about today's episode. And I'll start here. You don't have to be a whiskey drinker to know the name Jack Daniel's. You don't even need to be someone who drinks alcohol of any kind to know the name Jack Daniel's. It's an iconic American brand. And the history of that brand has been, in my mind, enriched, because of the relatively recent discovery of a man known as Uncle Nearest. The story is much better told by Fawn Weaver. She is an investor, an entrepreneur, and she's written a couple of best-selling books about having a happy marriage. When she saw a news story about Uncle Nearest, it set her on a path to her current job as CEO of the fastest-growing whiskey company in America.
I got the chance to talk with her a couple of weeks ago, so here's that conversation, starting with Fawn talking about where she was when she saw a brief story in The New York Times about Uncle Nearest.
[...]
Fawn Weaver: So, I was in Singapore, and it was on the cover of The New York Times International Edition, journalist Clay Risen had written a piece that he describes wonderfully as a lobe. Meaning there was only so much information he was able to gather through his one trip to Lynchburg, and then spending time trying to do this work from New York. And it became very clear to him that the story needed to be told, but he wasn't going to have the time or resources to really dive into the story. And I have to tell you, he was right, because I had to hire, I think it's 18, 19 archaeologists, genealogists, historians, conservators and literally pull documents from six different states, thousands and thousands of documents, to really be able to not just piece the story together, but to be able to prove the story.
But I will tell you what brought me to Lynchburg was not this story about whiskey, it was not this story about Jack Daniel as a grown man, and in Lynchburg they called him Uncle Jack. And the most-respected men that would've walked down the street during that time were named Uncle Jack and Uncle Nearest. So, Nathan Green, we know that as his legal name, but what we also know is, he was an enslaved man. And formerly enslaved people, a lot of times, following slavery, chose to go by a different name. And that had to do with the fact that a lot of them were named after their slave owners or their slave owner's children.
The largest slave owner in this area was named Nathan, and, yes. [laughs] And so, you kind of look at it and say, all right, there is a really good chance that he did not want the same name as Nathan Bedford Forrest who was trading over 1,000 slaves a year. And so, there is a really good chance. But what we know is, when Uncle Nearest and Uncle Jack walked through town, it was nothing but respect.
And as I began diving through this story -- I write books, as you mentioned, about love, I don't intend on changing that, people keep asking me to write books on business. And like, I thought about 45 I can refer you to, I love them all, but what I can refer you to is books on love written by powerful women. That I have to do right by my side. [laughs]
But what really drew me to this story were two things. The first is, if you look at that original New York Times article, there is a photo that was prominent in the article itself. And it was a picture of Jack Daniel with his crew. It's the only known picture that Jack ever took with his crew. But if you look closely at the photo, people notice that there is an African-American to his right, which in-and-of-itself, taken in the early 1900s, about 1904, that already would have been extraordinary. But if you really zoom-in on that photo and you look, you'll notice that Jack Daniel, the most famous American whiskey maker of all time, has ceded the center position to the Black man. That is astounding. Jack is off-center, Nearis Green's son who's at the center of this picture with his crew.
And so, I knew that this story had to have been about more than just an African-American taught Jack Daniel. You don't cede center position to someone's son if all they were to you was a teacher. And so, that was the first thing that drew me in.
The second thing that drew me in, is I've bought Jack Daniel's biography, 1967, written at the height of the civil rights era. So, if you know anything about what was going on here in '65 and '66 when it was being written, and '67 when it was published, it was not a pretty time in civil rights history, especially in the South. And so, you have this biography written by a White reporter from Tuscaloosa, Alabama, that comes to a town called Lynchburg, Tennessee [laughs] to write the authoritative biography on the most famous White whiskey maker. And he includes Nearis Green and his boys 50 times in a biography this thick. Every single person who the biographer was speaking to were Jack's nephew who took over the distillery and then his children, Jack's great nephews, the four of them, that then took over after their father. And so, you're talking to the people who knew Jack the best, who knew him the most. And they included Nearest and his boys more times than Jack's own family. So, what that said to me was this story was not just about whiskey or a whiskey maker, this story was in part about an African-American elder and a White orphan, who not only he taught, but who developed this incredible relationship and mentorship.
But then, following the Civil War, when Jack Daniel decided to take the distillery he had been working at alongside Nearis Green to buy that distillery, to rename it Jack Daniel Distillery and he asked for Nearis to be his first master distiller.
And so, the story I was chasing when I came to Lynchburg was a story of love, and it's the story I found when I got here.
Hill: So, at what point in this process, because I know you went into this, and pretty quickly in the process you're thinking, I'm writing another book about love, it's just different from what I've written before, at what point in that process do you decide to put the book idea aside for the moment and say, actually, I think I want to start a distillery?
Weaver: I didn't put the book idea aside, I was very much still writing it, but the home on our bottle; anyone who looks at an Uncle Nearest bottle, there is a home on there. That is the home where Jack Daniel grew up, that home sits on a 313-acre property that we own where the original Distillery No. 7 in district No. 4 sat. And Nearis Green is the only known master distiller for Distillery No. 7. And so, you have this property that I have been in town for less than an hour, at the library, doing research, before Jack Daniel's eldest descendant walks through the door and offers her help. Because very quickly on, word got around that The New York Times' best-selling Black woman [laughs] from Los Angeles was in town and writing on this story of this enslaved man teaching Jack Daniel.
You have to remember, if you go back to 2016, if you look at any of the articles that were written after Clay's piece. Clay's piece was not negative in the least, Clay's piece simply said, until now we have known a White preacher and distiller as Jack's teacher, however, it's more likely that it was actually this African-American -- this enslaved man, who worked on the property of this preacher alongside Jack Daniel, who also was working as a chore boy.
And so, if you think about it, if I show up in town, why would you think a Black woman from Los Angeles was looking for a story of love? I mean, it doesn't even seem plausible, but that is why I was there. And so, the eldest descendant gets called to the library, once a librarian calls and says, hey, there's somebody here doing research on your family. [laughs]
And she comes down and I could see in her eyes, I could see in her face, and for very good reason, a concern. And I looked her in the eyes and I said, I am not here to harm your family's legacy. I believe that the press and social media have this story wrong. And I believe that, and I listed all the reasons I believed that. Most of it comes from Jack's own biography. I said, if he wanted to hide a person or steal a recipe or ... this is the worst place to document all that. [laughs]
And so, I told his eldest descendant, I said, listen, if I do the research and I discover that Jack is not who I believed he is, and if I discover that this was not a story of love, honor and respect, as I believe that it is, someone will come down here and pull the same, exact research as me, nothing that happens in the dark ever stays in the dark, it always comes to light. I said, however, you have my word it will not be written by me, that is not why I'm here. And so, she said to me, in that case, I want to help you. And she pulls out her cellphone and she gives me the names and numbers of Nearis Green's descendants. They grew up together. They ate around the dinner table together. They were still friends. And the last thing she said after giving me names and numbers and offering to help, before she leaves out of the library, she said, hey, you know that farm that you read about in Jack's biography, you realize it's for sale. Of course, I did not, why would I think a property 150 years with a house still standing. No, absolutely not, I didn't know it was for sale.
And so, the long answer to your short question is, the person who she then connected me with to take me to the home was her cousin Sherrie Moore, and Sherrie Moore had been in the family business her entire life. And when she retired from the family business, Jack Daniel's Distillery, after 31 years, she was their head of whiskey operation. And as we began diving more and more into this research, and I was sharing with them information I found out about their family, which matched the story that I believed I was going to find here in Lynchburg, then one day she says to me, you know, if you ever decide to honor Nearis with a bottle, I will come out of retirement to make sure you get it right.
And not long after that, I was meeting with about 40 or 50 of Nearis' descendants and I said what is the one thing you think should happen in order to honor your ancestor? And they said, we think that his name should be on a bottle, he deserves to have his own bottle. And I literally called Sherrie after that meeting and said, listen, if you will come out of retirement, I will raise the money. And that's how Uncle Nearest got started.
Hill: It's amazing, in part because of the reaction from the people that -- if you're just looking at the story in terms of sides, you can look at, well, there's the Jack Daniel's side, there are the people on that side. And the reaction is amazing for a couple of reasons, but one of them is, it reminds me of, in sort of the early 1990s when the Small Batch Bourbon craze, for lack of a better term, started to get going, yet Booker Noe, the grandson of Jim Beam. Jim Beam really started with their Small Batch Bourbons. There was this sense that all of the distilleries in Kentucky, while they compete with one another, were also all working together, there was a collegiality about this endeavor, because they saw it as a way to grow this segment. And that was one of the things I was thinking of when I was reading about, sort of, the reaction from some of the folks on Jack Daniel's side of this equation. Because they saw it as a way to, sort of, embrace the history, you know, because let's face it, there's a version [laughs] of this story where that's not the reaction, there's a version of this story, where the librarian calls and someone comes into the library to cause trouble of some sort.
Weaver: Yeah, absolutely. And the thing that I love about this story the most is, beside the fact that it's absolutely true, is the only reason we know who Nearis Green is; people give me so much credit, and I always try to shift that credit, because, yes, I did the digging, but you have to understand that the only reason we know who Nearis Green was is because Jack took the time to honor him while Jack was alive. And then Jack's nephew, Lem, took the time to continue honoring Nearis and his children when he was alive, and every generation. So, that's the only reason that we know. It isn't that I was able to just dig, dig, dig and find Nearis Green was the first master distiller and show a document that no one had seen, they have gone on record enough times [laughs] that it was very clear they wanted to make sure people knew who was Jack's first master distiller, who taught him, who was his mentor, that's extraordinary.
Because if you go up to the folks in Kentucky, and God bless them, I love all of them, I work side-by-side with them, but they all had African-Americans at their distilleries in the beginning; name one of them. And so, the only reason that we're able to honor Nearis Green as the first known African-American master distiller is because Jack named him. And I think that's remarkable.
Hill: I want to talk a little bit about the business that you have started. And let's just start with where we are right now in this pandemic with COVID-19, how are your employees holding up and what has it done to the production side of your business?
Weaver: Our employees are holding up fantastic. On the production side, we've ramped up. [laughs] We have been selling like crazy. And so, there is no time to slow that process down. And so, we lay down anywhere between 4,000 and 7,000 barrels a year. That is not changing this year because of how crazy it is out there. And our team, you know, we made a decision very early on, and we began having weekly video calls with the entire company. And those calls were really, you could have just called them hope calls. The entire conversation, we never talked about what challenges were going on in the field, what challenges were in our industry, we didn't care. The only thing that we talked about was our ability to not lose heart and our ability to overcome any challenge, and that we had the team to do it. And the team believed it 100%.
And so, even though we work from home, shelter-in-place, two months straight. Not one person left the house unless they were going to the grocery store. I did not allow one person into the field during that period of time. And when we closed out each of the Q1 and Q2. When we closed out Q1, because we -- on-premise basically shut down in March of this year. So, on-premise, the restaurants, the bars. And so, when you have something like that happen, you automatically think, my God! This is about to start tanking.
And when we closed out Q1, it was our six quarter in a row of triple-digit gains. I don't know many industries where you can just go quarter-over-quarter triple-digit gains. And so, I remember that earnings report going out to our investors and them going, oh, boy! I guess that's going to stop for Q2, like, we're not going to be able to see this again. And Q2 was our seventh quarter in a row of triple-digit gains. And so, I think the thing that we have to understand about American whiskey is it is a native spirit, and it is what people are going to drink whether high or low, good times or bad times. And if we embrace that, which we have, and understand that, yes, who's drinking it may change over this period of time, but there's still somebody who's going to want to drink American whiskey, then you're able to just keep pivoting. So, I can say that we have pivoted as an industry multiple times during this coronavirus, but this industry is solid and it's doing incredibly well.
Hill: It's amazing growth. And I should just point out for those watching and listening, Uncle Nearest, the fastest-growing independent whisky brand in U.S. history, all the more impressive to me because of the aging process. You know, good vodka takes a lot less time to make [laughs] than good whiskey. Which leads me to this. When you decide to go down the avenue of starting a distillery, honoring Uncle Nearest by putting him on a bottle, was there any pushback from people you went to talk to, or was the story so great that you were beating off investors with a stick?
Weaver: Oh, yeah, beating off investors with a stick is for sure, [laughs] still to this day. And so, folks will ask me, how do I set my valuation? Because I get so many incoming investor requests. And so, C Series, I set a valuation and said, this is where we are, and Series A, Series B, same thing. And after each series, when I'd get incoming, I'd say, this is my next number. When I hit that number, I'll let you know, then I'll open up another round. And so, we've done it a little different than, I think, most.
The interesting thing about coming into this industry is one that people may or may not expect, the greatest challenge that I would say my team faced is, I hired an executive team of all women. Now, they're the best of the best in their fields, and I wasn't looking for women, it just so happens that the best of the best for this brand were all women. And I remember my SVP of Global Sales, [Kate Jerkens] and my Head of Whiskey Operation, [Sherrie Moore] Sherrie Moore and Kate Jerkens, when we were beginning this, we all had a conversation one day and realized we were having the exact same problem. And that problem was, we couldn't get calls back. So, we knew that we needed to be able to source a whiskey in Tennessee that was aged and that was still being made the way that Nearis made it. There were only so many that were doing that. We were going to need to buy bottles and corks and have a co-packer and all the rest of the stuff before we had our own distillery. We knew we needed help.
We couldn't get any calls back. So, I called my husband who's an Executive Vice President at Sony Pictures. So, all you have to do is Google him and know he's busy. I called him and said, babe, so we have just discovered that we are getting no phone calls back and everyone we're calling are men, we're thinking it may be a coincidence, but could you just test this theory out for me. And so, we all sent him the names and numbers of the people along with a brief synopsis of what we needed him to know before calling that person. And in every single instance, people that we have been waiting for call us back for weeks, got back to him in five minutes or took the call.
And the calls would also, by the end of it would go, hey, do you drink beer, you want to meet at a bar, do you golf, you want to meet on the course? And so for, I know, a lot of women that's bothersome, for me, I looked at it as less work, because [laughs] if I can turn over some of these calls to him and he could make a very quick phone call and get it done, that allowed me to focus on other things.
And so, for the first year-and-a-half, maybe two years, if you look at any interview that I ever did, you will never see me referenced as the CEO of Uncle Nearest, I'm the Chief Historian ... never, people thought he was the CEO for the first two year. And I'm like, guys, all you had to do is Google him to know he wasn't the CEO. [laughs]
Hill: I mean, get on LinkedIn, do a little bit of homework.
Weaver: [laughs] But it worked. And he calls me one day and he says, babe, we're Remington Steele. [laughs]
Hill: [laughs] I'm going to come back to the business side in just a second, but I would be remiss if I did not ask this question, and I'm but I'm not trying to intrude in your personal life, but because you have written a couple of best-selling books on having a happy marriage. What was the reaction from your husband when, as I read it in one article, you had a birthday coming up and he said, I think I want to take us to Paris because we like to travel around the world, and you said, I have an idea, let's go to Lynchburg, Tennessee instead.
Weaver: [laughs] He was not happy about the 40th birthday, and I tease him, that if something had happened to us here, then nobody would have known where to find us, because he was so embarrassed that I had chosen for my 40th birthday to go to a little town called Lynchburg in Tennessee, that he told everyone he was taking me Bourbon-tasting. So, everyone would have been looking for us in Kentucky. [laughs] But, no, I mean, he's an African-American man, he's 6'4", he is a, you know, a big guy, the last place he wants to go is a town with lynch in the name. I think it's fair. And so, no, he was not interested. And he rammed through every city that he knew I loved around the world, and finally, after weeks of this, he says, OK, babe, I got it. I know you've been wanting to go to Prague, you've not been to Prague yet, everywhere else I have been. And I said, you're right, I would love to go to Prague, let's do that for my 40th birthday, but let's go by way of Lynchburg.
[laughs] And by then, my husband employs a lobbyist for a living, that's a part of his job. And he says, you know, if I could just employ you as a lobbyist, boy! Would I get a lot done, because I lobby to no end. And so, what I wanted for my 40th birthday is what I got. And that was to chase this story, even if for only four days, which was what he said was the limit. We will go for four days, [laughs] and then we're leaving.
But I have to tell you, once we got here and he met the people here, and they were amazing, wonderful people. And the way that things lined up so quickly, he was absolutely certain very early on that this was about more than whiskey. And that for whatever reason, I have been the one chosen to tell this story. And so, it was not difficult at all after that point. I mean, we bought the farm on the second day we were here. [laughs] So yeah, it wasn't hard.
Hill: The business of whiskey is very different from the time of Jack Daniel's. There are corporations, there are public companies: Diageo; Brown-Forman, which owns Jack Daniel's; Constellation Brands. What is something every investor should know before they buy shares of a spirits company?
Weaver: You know, I think you really need to know the leadership. And I don't think that's any different from any industry., I learned very early on, by losing several million dollars, to not invest in a brand or an overall industry, you invest in the person who is leading that brand. And so, you have to really look at who is leading Diageo; who is leading Brown-Forman, Lawson Whiting over there. And then you have to look at their track record of leadership, and that will tell you all you need to know, because in a moment like this, with coronavirus, we've seen a lot of people make some pretty big mistakes. And if you look into our industry, I think we have been really, really steady, overall. You've not seen too many make major decisions.
Now, for craft distilleries, which we technically fall within, I'd say a lot of them made mistakes. The moment things started going bad, they began laying off and furloughing very quickly. Well, then that makes it very difficult to get your people fired up and ready to go the moment shelter-in-place ends. And so, those leaders who decided to stick with their employees and say, listen, we are not going to make permanent decisions for temporary problems, those are the ones that I would back.
Hill: To the extent that you have a crystal ball, what does the next year or two look like for Uncle Nearest distillery? I'm assuming an eighth consecutive quarter of triple-digit growth is just 90 days away, but where do you want to take this distillery? Because there are people who get into the beverage business, whether it is alcohol, whether it's beer, wine, certainly nonalcoholic beverages, and their end goal is to sell to someone enormous, Coke, [Coca-Cola] Pepsi [PepsiCo] or Constellation Brands, or Diageo that sort of thing. What do the next couple of years look like for Uncle Nearest?
Weaver: Yeah. My goal was to not to sell to any of the big guys; it is the exact opposite of that. And a part of the reason is, is No. 1, there has never been an African-American to lead a major spirit brand, period. I would be foolish to come in and make history and to be the first and then turn it over to one of the big guys, because in case you hadn't noticed, all of the big guys are White male. And so, then we no longer have [laughs] someone in that place.
But for Uncle Nearest, you mentioned it earlier, it's the fastest-growing independent American whiskey brand in U.S. history. I'm not content with being the fastest-growing American whiskey brand, I want to be the fastest-growing American premium spirit of all times. And the only one who has beat us, at this point in their lifespan, is Casamigos, that's who we're going after, not because they're not fantastic, but because they're tequila, and American whiskey is the native spirit, and that is who should have the record in America, and that's what we're going to do.
Hill: Last question before I let you go, and I appreciate your time because I can only guess at how busy you are particularly during this time. I have been to the Uncle Nearest website, I have a bottle of the 1856 on its way to my home. How would you recommend I enjoy it?
Weaver: Oh, gosh, it depends. You already said that you love whiskey, right?
Hill: Yes.
Weaver: Okay. Well, Uncle Nearest is the most awarded American whiskey of 2019, so far of 2020, I say enjoy it neat, because the world has given it every double gold there is, the World's Best Tennessee Whiskey, if you go across the spectrum and just look for what whiskey ranked best, best, best, best, 90 top awards in two years. So, I'd say, drink it neat, it's how I drink it.
[...]
Hill: Since I had that conversation with Fawn Weaver, the bottle did arrive and I cannot recommend it highly enough. If you're not a whiskey drinker, this is one of those whiskeys that makes a great gift for someone in your life who is a whiskey drinker, in part, because there's an amazing story that's a part of it.
If you want to learn more, just go to UncleNearest.com.
As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.
That's going to do it for this edition of MarketFoolery. The show is mixed by Dan Boyd, I'm Chris Hill, thanks for listening, we'll be back on Monday.
Chris Hill has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Constellation Brands. The Motley Fool recommends Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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A full transcript follows the video. See the 10 stocks Stock Advisor returns as of 2/1/20 This video was recorded on August 5, 2020. And our team, you know, we made a decision very early on, and we began having weekly video calls with the entire company.
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A full transcript follows the video. See the 10 stocks Stock Advisor returns as of 2/1/20 This video was recorded on August 5, 2020. And our team, you know, we made a decision very early on, and we began having weekly video calls with the entire company.
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A full transcript follows the video. See the 10 stocks Stock Advisor returns as of 2/1/20 This video was recorded on August 5, 2020. And our team, you know, we made a decision very early on, and we began having weekly video calls with the entire company.
|
A full transcript follows the video. See the 10 stocks Stock Advisor returns as of 2/1/20 This video was recorded on August 5, 2020. And our team, you know, we made a decision very early on, and we began having weekly video calls with the entire company.
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2020-08-04 00:00:00 UTC
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Diageo Says Higher North American Alcohol Sales Can't Offset Drops Elsewhere
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https://www.nasdaq.com/articles/diageo-says-higher-north-american-alcohol-sales-cant-offset-drops-elsewhere-2020-08-04
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Alcoholic drinks maker Diageo (NYSE: DEO) reported its fiscal-year results for the period ending June 30, 2020, and it was a tale of two halves. After what the company called a consistent first half, the coronavirus significantly affected its business in the second half.
The maker of Johnnie Walker whisky, Ketel One vodka, and Guinness beer reported organic net sales were down 8.4% for the year, as growth in North America couldn't offset declines around the world triggered by the pandemic in the second half of the fiscal year.
Image source: Getty Images.
Second-half sales included a dip of 1% in North America versus the prior-year period, which still resulted in a 2% full-year increase. But after first-half gains in all other geographies, pandemic-related closures and other impacts caused drops in organic net sales. They were down 31% in Europe and Turkey, and 40% in Latin American and the Caribbean. Overall sales dropped 23% in the second half.
CEO Ivan Menezes said, "Fiscal 20 was a year of two halves: after good, consistent performance in the first half of fiscal 20, the outbreak of COVID-19 presented significant challenges for our business, impacting the full year performance."
The company said it has reinforced its already strong liquidity by pausing its share buyback program, adding a $3.25 billion credit facility, and issuing $2.6 billion in bonds in April. It announced a second-half dividend payment at the same rate as the previous comparable period.
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*Stock Advisor returns as of June 2, 2020
Howard Smith has no position in any of the stocks mentioned. The Motley Fool recommends Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Alcoholic drinks maker Diageo (NYSE: DEO) reported its fiscal-year results for the period ending June 30, 2020, and it was a tale of two halves. Second-half sales included a dip of 1% in North America versus the prior-year period, which still resulted in a 2% full-year increase. But after first-half gains in all other geographies, pandemic-related closures and other impacts caused drops in organic net sales.
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Alcoholic drinks maker Diageo (NYSE: DEO) reported its fiscal-year results for the period ending June 30, 2020, and it was a tale of two halves. The maker of Johnnie Walker whisky, Ketel One vodka, and Guinness beer reported organic net sales were down 8.4% for the year, as growth in North America couldn't offset declines around the world triggered by the pandemic in the second half of the fiscal year. But after first-half gains in all other geographies, pandemic-related closures and other impacts caused drops in organic net sales.
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Alcoholic drinks maker Diageo (NYSE: DEO) reported its fiscal-year results for the period ending June 30, 2020, and it was a tale of two halves. The maker of Johnnie Walker whisky, Ketel One vodka, and Guinness beer reported organic net sales were down 8.4% for the year, as growth in North America couldn't offset declines around the world triggered by the pandemic in the second half of the fiscal year. CEO Ivan Menezes said, "Fiscal 20 was a year of two halves: after good, consistent performance in the first half of fiscal 20, the outbreak of COVID-19 presented significant challenges for our business, impacting the full year performance."
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Alcoholic drinks maker Diageo (NYSE: DEO) reported its fiscal-year results for the period ending June 30, 2020, and it was a tale of two halves. The maker of Johnnie Walker whisky, Ketel One vodka, and Guinness beer reported organic net sales were down 8.4% for the year, as growth in North America couldn't offset declines around the world triggered by the pandemic in the second half of the fiscal year. Second-half sales included a dip of 1% in North America versus the prior-year period, which still resulted in a 2% full-year increase.
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727702.0
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2020-08-04 00:00:00 UTC
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Diageo FY Pretax Profit Declines; Organic Net Sales Down 8.4% - Quick Facts
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DEO
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https://www.nasdaq.com/articles/diageo-fy-pretax-profit-declines-organic-net-sales-down-8.4-quick-facts-2020-08-04
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nan
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(RTTNews) - Diageo Plc (DGE.L, DEO) reported profit before tax of 2.04 billion pounds for the year ended 30 June 2020 compared to 4.23 billion pounds, previous year. Earnings per share declined to 59.9 pence from 130.1 pence primarily due to exceptional operating items. Earnings per share before exceptional items declined to 109.0 pence from 130.3 pence.
Fiscal year reported net sales were 11.8 billion pounds, down 8.7% driven by organic declines. Organic net sales were down 8.4%, with growth in North America more than offset by declines in all other regions. Organic volumes were down 11.2%.
The recommended final dividend for the year ended 30 June 2020 is 42.47 pence, the same as the final dividend for the year ended 30 June 2019. This brings the full year dividend to 69.88 pence per share, an increase of 2% on the prior year. The final dividend will be paid to holders of ordinary shares and US ADRs on the register as of 14 August 2020. The final dividend will be paid to shareholders on 8 October 2020 and payment to US ADR holders will be made on 14 October 2020.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Diageo Plc (DGE.L, DEO) reported profit before tax of 2.04 billion pounds for the year ended 30 June 2020 compared to 4.23 billion pounds, previous year. Fiscal year reported net sales were 11.8 billion pounds, down 8.7% driven by organic declines. Organic net sales were down 8.4%, with growth in North America more than offset by declines in all other regions.
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(RTTNews) - Diageo Plc (DGE.L, DEO) reported profit before tax of 2.04 billion pounds for the year ended 30 June 2020 compared to 4.23 billion pounds, previous year. Earnings per share before exceptional items declined to 109.0 pence from 130.3 pence. Fiscal year reported net sales were 11.8 billion pounds, down 8.7% driven by organic declines.
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(RTTNews) - Diageo Plc (DGE.L, DEO) reported profit before tax of 2.04 billion pounds for the year ended 30 June 2020 compared to 4.23 billion pounds, previous year. The recommended final dividend for the year ended 30 June 2020 is 42.47 pence, the same as the final dividend for the year ended 30 June 2019. This brings the full year dividend to 69.88 pence per share, an increase of 2% on the prior year.
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(RTTNews) - Diageo Plc (DGE.L, DEO) reported profit before tax of 2.04 billion pounds for the year ended 30 June 2020 compared to 4.23 billion pounds, previous year. Fiscal year reported net sales were 11.8 billion pounds, down 8.7% driven by organic declines. The recommended final dividend for the year ended 30 June 2020 is 42.47 pence, the same as the final dividend for the year ended 30 June 2019.
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75f740bb-2f61-4a10-a8ce-f2786b9b46a4
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727703.0
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2020-07-29 00:00:00 UTC
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DEO Makes Bullish Cross Above Critical Moving Average
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DEO
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https://www.nasdaq.com/articles/deo-makes-bullish-cross-above-critical-moving-average-2020-07-29
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nan
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nan
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In trading on Wednesday, shares of Diageo plc (Symbol: DEO) crossed above their 200 day moving average of $148.63, changing hands as high as $150.30 per share. Diageo plc shares are currently trading up about 2.2% on the day. The chart below shows the one year performance of DEO shares, versus its 200 day moving average:
Looking at the chart above, DEO's low point in its 52 week range is $100.5179 per share, with $176.22 as the 52 week high point — that compares with a last trade of $149.65.
Click here to find out which 9 other stocks recently crossed above their 200 day moving average »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In trading on Wednesday, shares of Diageo plc (Symbol: DEO) crossed above their 200 day moving average of $148.63, changing hands as high as $150.30 per share. The chart below shows the one year performance of DEO shares, versus its 200 day moving average: Looking at the chart above, DEO's low point in its 52 week range is $100.5179 per share, with $176.22 as the 52 week high point — that compares with a last trade of $149.65. Click here to find out which 9 other stocks recently crossed above their 200 day moving average » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In trading on Wednesday, shares of Diageo plc (Symbol: DEO) crossed above their 200 day moving average of $148.63, changing hands as high as $150.30 per share. The chart below shows the one year performance of DEO shares, versus its 200 day moving average: Looking at the chart above, DEO's low point in its 52 week range is $100.5179 per share, with $176.22 as the 52 week high point — that compares with a last trade of $149.65. Click here to find out which 9 other stocks recently crossed above their 200 day moving average » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In trading on Wednesday, shares of Diageo plc (Symbol: DEO) crossed above their 200 day moving average of $148.63, changing hands as high as $150.30 per share. The chart below shows the one year performance of DEO shares, versus its 200 day moving average: Looking at the chart above, DEO's low point in its 52 week range is $100.5179 per share, with $176.22 as the 52 week high point — that compares with a last trade of $149.65. Click here to find out which 9 other stocks recently crossed above their 200 day moving average » The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In trading on Wednesday, shares of Diageo plc (Symbol: DEO) crossed above their 200 day moving average of $148.63, changing hands as high as $150.30 per share. The chart below shows the one year performance of DEO shares, versus its 200 day moving average: Looking at the chart above, DEO's low point in its 52 week range is $100.5179 per share, with $176.22 as the 52 week high point — that compares with a last trade of $149.65. Diageo plc shares are currently trading up about 2.2% on the day.
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727704.0
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2020-07-19 00:00:00 UTC
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Is Diageo Stock a Buy?
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DEO
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https://www.nasdaq.com/articles/is-diageo-stock-a-buy-2020-07-19
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nan
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nan
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Between the backdrop of coronavirus-related shutdowns and the stock's subpar performance of late, it would be easy to conclude that spirits company Diageo (NYSE: DEO) is in above-average trouble. And to be fair, much of the market's concern regarding the organization is merited. In April, Diageo withdrew its full-year guidance, citing uncertainties about when life might return to normal. Bars and restaurants remain relatively empty.
Not everything is quite as it appears with just a superficial look, though. While it and peers like Brown-Forman (NYSE: BF.B) (NYSE: BF.A) and Constellation Brands (NYSE: STZ) clearly have some challenging but attainable recovery goals ahead, Diageo may be better positioned for a rebound than its competition.
Image source: Getty Images.
Closed bars aren't the end of the world
You may know the company better than you think. Diageo is the name behind spirits brands like Johnnie Walker, Smirnoff, and Captain Morgan. It also owns Guinness, along with a few other familiar franchises. It's a premium player, but its goods are still priced accessibly for most consumers. And those consumers stocked up on and consumed booze at a brisk rate while stuck at home for the past several month when there wasn't much else to do.
Investors are proverbially flying blind in terms of figuring out how Diageo has fared lately, however. Its last fiscal report was posted in January, covering the last six months of 2019 when the coronavirus outbreak wasn't a worry. We won't get the next update until Aug. 4, which will cover a six-month stretch largely crimped by COVID-19. Investors understandably predict the results won't be great. While the S&P 500 has pared back much of its losses since March and is now flat year to date, Diageo shares are down 15% for the same period and haven't budged since May.
That report may not be quite as rough as expected for one big reason though: Only about 20% of the company's North American revenue actually comes from on-trade channels, the restaurants and bars most affected by widespread lockdown measures. The rest is off-trade business, which hasn't been entirely disrupted. In fact, Nielsen recently reported that between the beginning of coronavirus lockdowns in the United States and the week ending July 4, off-trade sales of spirits were up nearly 34% year over year.
Better diversified
While consumers' strong demand for off-premise consumption is at an extreme end of the spectrum for the booze industry, the revenue mix isn't especially unique to Diageo. Brown-Forman says about 20% of its business comes from on-trade venues as well. Despite the company's focus on beer, Constellation CEO Bill Newlands revealed in an interview earlier this year that more than 80% of its sales are similarly conducted through off-premise channels.
Even so, Diageo has something of a geographic edge on its rivals as it is highly diversified, in terms of sales as well as production. North America accounted for 35% of last year's top line, while half of Brown-Forman's sales come from the United States alone. The vast majority of Constellation's wine and spirits shipments are made to U.S. customers. Likewise, most of Constellation's breweries, wineries, and distilleries are located in North America. Brown-Forman's production sites are slightly more diversified but not overwhelmingly so. Outside of the United States, the bulk of its properties are in Scotland. Diageo, however, boasts 150 production sites all over the world, only nine of which are found in North America (and those nine are spread out across the country). It has granted production licenses to 15 operators in Africa, and it even has several production operations in China, India, and Australia.
It's difficult to quantify the benefits of this sort of diversification, but with COVID-19 not yet contained, production and sales options that don't have to clear tough transportation hurdles could end up being a very big advantage.
Connecting with consumers online
Indeed, Diageo may be even more prepared to serve customers stuck at home all over the world in the near future than it was just in March. Last month, Gregorio Gutierrez -- the spirits company's managing director for Brazil, Paraguay, and Uruguay -- told Reuters that the company ramped up its e-commerce capacity to cater specifically to consumers in Brazil who were still unable to return to bars and restaurants.
The effect of that effort is not yet clear, but in a market where up to half of the company's sales are driven by on-premise or on-trade purchases, even offsetting a small piece of that lost bar and restaurant business is beneficial.
Diageo has seemingly not done as much to beef up its e-commerce capacity in other markets -- selling alcohol online is something of a regulatory hurdle in most locales if not outright prohibited. To the extent it's able to do so, though, the company appears to be doing what it can to offer direct-to-consumer sales.
Stay sober, but drink up
Don't misread the message. The world's coronavirus abatement measures have undoubtedly hurt the booze industry, and Diageo hasn't been wholly immune to that disruption. While it's an off-premise powerhouse in the U.S., on-premise sales still account for about half of its top line in Europe as well as other regions.
The stock's poor performance since February, however, appears to price in a worst-case scenario that doesn't overwhelmingly apply to this particular company. Investors have also given Diageo little credit for enhancing its e-commerce capabilities in Brazil, which may reflect similar measures taken in other parts of the world that weren't as well touted.
Data source: Thomson Reuters/Refinitiv. Chart by author.
Analysts are pricing in a near-term sales and earnings lull, but the fact that things may be much better for this spirits name than they seem at first glance should make Diageo a compelling prospect for investors willing to tolerate some near-term risk.
10 stocks we like better than Diageo
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*Stock Advisor returns as of June 2, 2020
James Brumley has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Constellation Brands. The Motley Fool recommends Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Between the backdrop of coronavirus-related shutdowns and the stock's subpar performance of late, it would be easy to conclude that spirits company Diageo (NYSE: DEO) is in above-average trouble. That report may not be quite as rough as expected for one big reason though: Only about 20% of the company's North American revenue actually comes from on-trade channels, the restaurants and bars most affected by widespread lockdown measures. It's difficult to quantify the benefits of this sort of diversification, but with COVID-19 not yet contained, production and sales options that don't have to clear tough transportation hurdles could end up being a very big advantage.
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Between the backdrop of coronavirus-related shutdowns and the stock's subpar performance of late, it would be easy to conclude that spirits company Diageo (NYSE: DEO) is in above-average trouble. While it and peers like Brown-Forman (NYSE: BF.B) (NYSE: BF.A) and Constellation Brands (NYSE: STZ) clearly have some challenging but attainable recovery goals ahead, Diageo may be better positioned for a rebound than its competition. North America accounted for 35% of last year's top line, while half of Brown-Forman's sales come from the United States alone.
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Between the backdrop of coronavirus-related shutdowns and the stock's subpar performance of late, it would be easy to conclude that spirits company Diageo (NYSE: DEO) is in above-average trouble. Last month, Gregorio Gutierrez -- the spirits company's managing director for Brazil, Paraguay, and Uruguay -- told Reuters that the company ramped up its e-commerce capacity to cater specifically to consumers in Brazil who were still unable to return to bars and restaurants. Investors have also given Diageo little credit for enhancing its e-commerce capabilities in Brazil, which may reflect similar measures taken in other parts of the world that weren't as well touted.
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Between the backdrop of coronavirus-related shutdowns and the stock's subpar performance of late, it would be easy to conclude that spirits company Diageo (NYSE: DEO) is in above-average trouble. Closed bars aren't the end of the world You may know the company better than you think. In fact, Nielsen recently reported that between the beginning of coronavirus lockdowns in the United States and the week ending July 4, off-trade sales of spirits were up nearly 34% year over year.
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727705.0
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2020-07-14 00:00:00 UTC
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Is a Johnnie Walker Hard Seltzer What's Missing for Diageo?
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DEO
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https://www.nasdaq.com/articles/is-a-johnnie-walker-hard-seltzer-whats-missing-for-diageo-2020-07-14
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nan
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The coronavirus pandemic revealed a major weakness in the business model of Diageo (NYSE: DEO), namely that its operations are too tied to restaurants, bars, and clubs. Because of the shutdown caused by the pandemic, 20% of Diageo's North American business was put at risk, as was 50% of its European business.
Although package-good stores remained open during the crisis, analysts believe alcoholic beverages like Diageo's leading Johnnie Walker scotch and other spirits are more apt to be drunk by consumers when they're out on the town rather than at home. As a result, they see brewers being a better investment.
Image source: Getty Images.
Yet it's not the beer that analysts favor. It's the other beverages the brewers produce, such as hard tea and cider, but mostly hard seltzer, which has won over consumers' palates and shows no signs of letting up.
Although Diageo has over 200 brands in its portfolio across the full spectrum of spirits, and even has a sizable beer business under its Guinness brand, it doesn't have an effervescent drop of hard seltzer to its name, and that may be the most glaring omission for the distiller.
The beverage that bubbles to the top
Even during the pandemic, hard seltzer sales are soaring. According to Nielsen data, each week since March 21, the U.S. off-premise market saw dollar sales of hard seltzer exceed those for the week of July 4, 2019, the previous high-water mark for weekly sales.
And sales continue to achieve new heights: Market researchers say the week ending June 13 represented the fourth consecutive week that hard seltzer was the driving force behind more than $100 million in retail off-premise dollar sales. Nielsen says it was also the 10th consecutive week during which annual retail hard seltzer dollar sales increased by at least $50 million.
Where Nielsen previously expected hard seltzer to account for 10% of the beer category's sales by the end of the summer, it now anticipates the beverage will represent 15%.
Two companies continue to dominate the market, White Claw hard seltzer from industry leader Mark Anthony Brands and Truly from Boston Beer. Together they have a 75% market share.
There are literally dozens of brands now clamoring to meet insatiable consumer demand. Where there had been just 10 hard seltzer brands on the market at the beginning of 2018, that jumped to 26 by the start of 2019, and more than 65 brands to kick off this year.
While you'll find the biggest brewers in the space, including Anheuser-Busch InBev, Molson Coors Brewing, and Constellation Brands, all pushing their own hard seltzer concoctions, you'll be hard pressed to find a major distiller doing the same.
It's hard to distill the reasons for the industry's avoidance
Not only does Diageo not participate in the hard seltzer market, but neither does Brown-Forman (NYSE: BF.A)(NYSE: BF.B), which produces the top-selling Jack Daniel's Tennessee Whiskey. While it has branched out into various flavored offshoots of the brand, including ready-to-drink beverages, it has no hard seltzer.
Japan's Beam Suntory, which makes Jim Beam whiskey, along with vodka, gin, rum, and other spirits, has also neglected the market, though it may come closest with a beverage called chu-hi, a fruit-flavored carbonated water drink, but it's only available in certain Asian markets.
Diageo generates 25% of its sales from scotch, 16% from beer, and another 11% from vodka. It says drinkers are moving away from beer and wine and toward spirits, which represent 53% of the global alcohol market by volume, up from 48% 10 years ago. But Diageo and other distillers are making a serious miscalculation by avoiding hard seltzer.
Now is the time to get in
Even as restaurants, bars, and clubs begin to reopen, investors shouldn't expect Diageo to bounce back quickly. Some states are delaying reopening or clamping down again. And even where these businesses are operational, they're having to enforce capacity limits that will stunt meaningful sales growth.
Because hard seltzer has also been gaining significant real estate in the on-premises market (Nielsen found those hard seltzer volumes sales surged 500% between 2018 and 2019) it's likely that its potential will be better than that of spirits when bars and restaurants reopen.
On-premise, off-premise, online, and all year round, hard seltzer has moved beyond being a seasonal drink. Diageo is making a mistake by not developing a hard seltzer, whether it's branded as Johnnie Walker or something else.
10 stocks we like better than Diageo
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Diageo wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of June 2, 2020
Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Boston Beer and Constellation Brands. The Motley Fool recommends Anheuser-Busch InBev NV and Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The coronavirus pandemic revealed a major weakness in the business model of Diageo (NYSE: DEO), namely that its operations are too tied to restaurants, bars, and clubs. Although package-good stores remained open during the crisis, analysts believe alcoholic beverages like Diageo's leading Johnnie Walker scotch and other spirits are more apt to be drunk by consumers when they're out on the town rather than at home. Two companies continue to dominate the market, White Claw hard seltzer from industry leader Mark Anthony Brands and Truly from Boston Beer.
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The coronavirus pandemic revealed a major weakness in the business model of Diageo (NYSE: DEO), namely that its operations are too tied to restaurants, bars, and clubs. And sales continue to achieve new heights: Market researchers say the week ending June 13 represented the fourth consecutive week that hard seltzer was the driving force behind more than $100 million in retail off-premise dollar sales. Now is the time to get in Even as restaurants, bars, and clubs begin to reopen, investors shouldn't expect Diageo to bounce back quickly.
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The coronavirus pandemic revealed a major weakness in the business model of Diageo (NYSE: DEO), namely that its operations are too tied to restaurants, bars, and clubs. Although Diageo has over 200 brands in its portfolio across the full spectrum of spirits, and even has a sizable beer business under its Guinness brand, it doesn't have an effervescent drop of hard seltzer to its name, and that may be the most glaring omission for the distiller. It's hard to distill the reasons for the industry's avoidance Not only does Diageo not participate in the hard seltzer market, but neither does Brown-Forman (NYSE: BF.A)(NYSE: BF.B), which produces the top-selling Jack Daniel's Tennessee Whiskey.
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The coronavirus pandemic revealed a major weakness in the business model of Diageo (NYSE: DEO), namely that its operations are too tied to restaurants, bars, and clubs. Where Nielsen previously expected hard seltzer to account for 10% of the beer category's sales by the end of the summer, it now anticipates the beverage will represent 15%. Where there had been just 10 hard seltzer brands on the market at the beginning of 2018, that jumped to 26 by the start of 2019, and more than 65 brands to kick off this year.
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727706.0
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2020-07-13 00:00:00 UTC
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You May Have to See to Believe Johnnie Walker Parent Company's New Sustainability Concept
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DEO
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https://www.nasdaq.com/articles/you-may-have-to-see-to-believe-johnnie-walker-parent-companys-new-sustainability-concept
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nan
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nan
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If you can't imagine drinks coming in paper bottles, you might be in for a surprise.
Diageo (NYSE: DEO), maker of the Johnnie Walker labels and Smirnoff Vodka, as well as other brands, has announced that it will pilot a sustainable, paper-only bottle for a limited-edition run of Johnnie Walker.
Beverage packaging that cares about the environment
Diageo said it is introducing the first bottle for spirits that is entirely plastic-free and made from sustainably sourced wood. The bottle will launch in 2021.
Image source: Diageo.
The company is working in partnership with Pilot Lite, a venture management firm that helps companies launch new technology and other ventures. The two have created Pulpex Limited, which is dedicated to developing technology that supports sustainable packaging.
The group is building a consortium of non-competing companies that include Unilever and PepsiCo and expects other leading companies to join in as well.
"We're proud to have created this world first," said Ewan Andrew, chief sustainability officer at Diageo. "We are constantly striving to push the boundaries within sustainable packaging and this bottle has the potential to be truly ground-breaking."
A novel concept
The bottle is made from wood-based pulp and is designed to be completely recyclable. The company is enthusiastic about the possibilities for the material and the range of goods it could affect.
Diageo said this project meets the "Consumption and Production" goal of the United Nations Sustainable Development Goals.
This isn't the first time a beverage company has tried to market its products with sustainable packaging. A British company, Frugalpac, launched a paper-based wine bottle last month, and Danish beer maker Carlsberg has been working on a prototype as well.
10 stocks we like better than Diageo
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Diageo wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 2020
Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool recommends Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (NYSE: DEO), maker of the Johnnie Walker labels and Smirnoff Vodka, as well as other brands, has announced that it will pilot a sustainable, paper-only bottle for a limited-edition run of Johnnie Walker. Beverage packaging that cares about the environment Diageo said it is introducing the first bottle for spirits that is entirely plastic-free and made from sustainably sourced wood. "We are constantly striving to push the boundaries within sustainable packaging and this bottle has the potential to be truly ground-breaking."
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Diageo (NYSE: DEO), maker of the Johnnie Walker labels and Smirnoff Vodka, as well as other brands, has announced that it will pilot a sustainable, paper-only bottle for a limited-edition run of Johnnie Walker. This isn't the first time a beverage company has tried to market its products with sustainable packaging. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
|
Diageo (NYSE: DEO), maker of the Johnnie Walker labels and Smirnoff Vodka, as well as other brands, has announced that it will pilot a sustainable, paper-only bottle for a limited-edition run of Johnnie Walker. Beverage packaging that cares about the environment Diageo said it is introducing the first bottle for spirits that is entirely plastic-free and made from sustainably sourced wood. 10 stocks we like better than Diageo When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen.
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Diageo (NYSE: DEO), maker of the Johnnie Walker labels and Smirnoff Vodka, as well as other brands, has announced that it will pilot a sustainable, paper-only bottle for a limited-edition run of Johnnie Walker. Beverage packaging that cares about the environment Diageo said it is introducing the first bottle for spirits that is entirely plastic-free and made from sustainably sourced wood. The company is working in partnership with Pilot Lite, a venture management firm that helps companies launch new technology and other ventures.
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5c0183f6-f43e-47e0-a33f-6ef268327c5d
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727707.0
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2020-07-13 00:00:00 UTC
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Diageo Unveils Plastic Free Paper-based Spirits Bottle
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DEO
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https://www.nasdaq.com/articles/diageo-unveils-plastic-free-paper-based-spirits-bottle-2020-07-13
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nan
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nan
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) said it has created a plastic free paper-based spirits bottle, made entirely from sustainably sourced wood.
The company will debut the new bottle with Johnnie Walker scotch whisky in early 2021. The move is part of the company's efforts to reduce plastic waste and minimize the environmental footprint of packaging.
Diageo, the maker of Johnnie Walker, Smirnoff and Guinness, said it has formed a new partnership with venture management company Pilot Lite to launch Pulpex Limited, a new sustainable packaging technology company.
Pulpex has developed the new, scalable paper-based bottle, made from sustainably sourced pulp to meet food-safe standards. The bottle will be fully recyclable in standard waste streams.
The packaging has been designed to contain a variety of liquid products and will form part of Diageo's commitment towards Goal 12 of the United Nations Sustainable Development Goals: 'Responsible Consumption and Production'.
Pulpex's technology enables it to produce a variety of plastic-free, single mould bottles that can be used across a range of consumer goods. The company has established a partner consortium of FMCG companies in non-competing categories, including Unilever and PepsiCo, to develop the technology further.
The consortium partners plan to launch their own branded paper bottles, based on Pulpex's design and technology, in 2021. Diageo noted that more partners are expected to be announced later this year.
Among other beverage companies, PepsiCo said it has decided to adopt aluminum can packaging for water, instead of plastic bottles, and also expand the use of recycled plastic.
PepsiCo noted that the move advances its goals to make its complete packaging recyclable, compostable, or biodegradable by 2025. It also plans to use 25 percent recycled plastic content in all its plastic packaging.
Coca-Cola, in January 2018, announced a global goal to help collect and recycle the equivalent of 100 percent of its packaging by 2030. The company also aims to make bottles with an average of 50 percent recycled content by 2030.
Earlier this year, Coca-Cola said it has no plans to abandon single-use plastic bottles as its consumers still want to use them.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) said it has created a plastic free paper-based spirits bottle, made entirely from sustainably sourced wood. Pulpex has developed the new, scalable paper-based bottle, made from sustainably sourced pulp to meet food-safe standards. Pulpex's technology enables it to produce a variety of plastic-free, single mould bottles that can be used across a range of consumer goods.
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) said it has created a plastic free paper-based spirits bottle, made entirely from sustainably sourced wood. Diageo, the maker of Johnnie Walker, Smirnoff and Guinness, said it has formed a new partnership with venture management company Pilot Lite to launch Pulpex Limited, a new sustainable packaging technology company. Pulpex has developed the new, scalable paper-based bottle, made from sustainably sourced pulp to meet food-safe standards.
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) said it has created a plastic free paper-based spirits bottle, made entirely from sustainably sourced wood. Diageo, the maker of Johnnie Walker, Smirnoff and Guinness, said it has formed a new partnership with venture management company Pilot Lite to launch Pulpex Limited, a new sustainable packaging technology company. Among other beverage companies, PepsiCo said it has decided to adopt aluminum can packaging for water, instead of plastic bottles, and also expand the use of recycled plastic.
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) said it has created a plastic free paper-based spirits bottle, made entirely from sustainably sourced wood. PepsiCo noted that the move advances its goals to make its complete packaging recyclable, compostable, or biodegradable by 2025. It also plans to use 25 percent recycled plastic content in all its plastic packaging.
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6c573109-558f-49e5-9469-99f8be037964
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727708.0
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2020-07-13 00:00:00 UTC
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Diageo To Debut 100% Plastic Free Paper-based Spirits Bottle - Quick Facts
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DEO
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https://www.nasdaq.com/articles/diageo-to-debut-100-plastic-free-paper-based-spirits-bottle-quick-facts-2020-07-13
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(RTTNews) - Diageo Plc (DGE.L, DEO) announced it has created the world's first 100% plastic free paper-based spirits bottle, made entirely from sustainably sourced wood. It will debut with Johnnie Walker Scotch Whisky, in early 2021.
Diageo has launched a new partnership with Pilot Lite to launch Pulpex Limited, a sustainable packaging technology company. Pulpex has established a partner consortium of FMCG companies in non-competing categories including Unilever, and PepsiCo. The consortium partners are each expecting to launch their own branded paper bottles, based on Pulpex Limited's design and technology, in 2021.
Richard Slater, Chief R&D Officer, Unilever, said: "We are going to halve our use of virgin plastic at Unilever, reducing our use of plastic packaging by more than 100,000 tonnes in the next five years."
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Diageo Plc (DGE.L, DEO) announced it has created the world's first 100% plastic free paper-based spirits bottle, made entirely from sustainably sourced wood. Pulpex has established a partner consortium of FMCG companies in non-competing categories including Unilever, and PepsiCo. The consortium partners are each expecting to launch their own branded paper bottles, based on Pulpex Limited's design and technology, in 2021.
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(RTTNews) - Diageo Plc (DGE.L, DEO) announced it has created the world's first 100% plastic free paper-based spirits bottle, made entirely from sustainably sourced wood. Diageo has launched a new partnership with Pilot Lite to launch Pulpex Limited, a sustainable packaging technology company. The consortium partners are each expecting to launch their own branded paper bottles, based on Pulpex Limited's design and technology, in 2021.
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(RTTNews) - Diageo Plc (DGE.L, DEO) announced it has created the world's first 100% plastic free paper-based spirits bottle, made entirely from sustainably sourced wood. Diageo has launched a new partnership with Pilot Lite to launch Pulpex Limited, a sustainable packaging technology company. The consortium partners are each expecting to launch their own branded paper bottles, based on Pulpex Limited's design and technology, in 2021.
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(RTTNews) - Diageo Plc (DGE.L, DEO) announced it has created the world's first 100% plastic free paper-based spirits bottle, made entirely from sustainably sourced wood. It will debut with Johnnie Walker Scotch Whisky, in early 2021. The consortium partners are each expecting to launch their own branded paper bottles, based on Pulpex Limited's design and technology, in 2021.
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8e52872d-dff2-4e04-9c1f-2a679195a650
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727709.0
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2020-07-13 00:00:00 UTC
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Consumer Sector Update for 07/13/2020: PEP, TSLA, DEO, XLP, XLY
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DEO
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https://www.nasdaq.com/articles/consumer-sector-update-for-07-13-2020%3A-pep-tsla-deo-xlp-xly-2020-07-13
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Consumer firms were climbing pre-bell Monday as shares of staples companies in the S&P 500 (XLP) were gaining 0.61% and consumer discretionary firms (XLY) were advancing by 0.96% in recent trading.
PepsiCo (PEP) was up more than 2% even after reporting Q2 core earnings of $1.32 per share, down from $1.54 per share a year earlier. Analysts polled by Capital IQ had expected earnings of $1.25 per share for the recent quarter.
Tesla (TSLA) slashed the price of its Model Y sport utility vehicle by $3,000 four months after it was launched, Reuters reported, noting that the California-based electric carmaker aims to maintain sales momentum during the COVID-19 pandemic. Tesla was recently rallying past 6%.
Diageo (DEO) was marginally higher after saying its joint venture Pulpex has created a 100% plastic-free, paper-based spirits bottle, and the first-of-its-kind bottle will be used to package its Johnnie Walker scotch in early 2021.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (DEO) was marginally higher after saying its joint venture Pulpex has created a 100% plastic-free, paper-based spirits bottle, and the first-of-its-kind bottle will be used to package its Johnnie Walker scotch in early 2021. Analysts polled by Capital IQ had expected earnings of $1.25 per share for the recent quarter. Tesla (TSLA) slashed the price of its Model Y sport utility vehicle by $3,000 four months after it was launched, Reuters reported, noting that the California-based electric carmaker aims to maintain sales momentum during the COVID-19 pandemic.
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Diageo (DEO) was marginally higher after saying its joint venture Pulpex has created a 100% plastic-free, paper-based spirits bottle, and the first-of-its-kind bottle will be used to package its Johnnie Walker scotch in early 2021. Consumer firms were climbing pre-bell Monday as shares of staples companies in the S&P 500 (XLP) were gaining 0.61% and consumer discretionary firms (XLY) were advancing by 0.96% in recent trading. PepsiCo (PEP) was up more than 2% even after reporting Q2 core earnings of $1.32 per share, down from $1.54 per share a year earlier.
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Diageo (DEO) was marginally higher after saying its joint venture Pulpex has created a 100% plastic-free, paper-based spirits bottle, and the first-of-its-kind bottle will be used to package its Johnnie Walker scotch in early 2021. Consumer firms were climbing pre-bell Monday as shares of staples companies in the S&P 500 (XLP) were gaining 0.61% and consumer discretionary firms (XLY) were advancing by 0.96% in recent trading. PepsiCo (PEP) was up more than 2% even after reporting Q2 core earnings of $1.32 per share, down from $1.54 per share a year earlier.
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Diageo (DEO) was marginally higher after saying its joint venture Pulpex has created a 100% plastic-free, paper-based spirits bottle, and the first-of-its-kind bottle will be used to package its Johnnie Walker scotch in early 2021. Consumer firms were climbing pre-bell Monday as shares of staples companies in the S&P 500 (XLP) were gaining 0.61% and consumer discretionary firms (XLY) were advancing by 0.96% in recent trading. PepsiCo (PEP) was up more than 2% even after reporting Q2 core earnings of $1.32 per share, down from $1.54 per share a year earlier.
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2afbe74f-f026-4fe5-9af3-0e758fe6bea3
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727710.0
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2020-07-03 00:00:00 UTC
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Why the Facebook Ad Boycott Could Be Good for Pinterest
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DEO
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https://www.nasdaq.com/articles/why-the-facebook-ad-boycott-could-be-good-for-pinterest-2020-07-03
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What started as a trickle has quickly turned into a flood.
Less than two weeks after a coalition of nonprofit organizations launched the #StopHateForProfit campaign, some of the world's biggest brands are pulling their advertising off of Facebook (NASDAQ: FB) -- at least for July. The moves are to protest the company's lax policies against the use of its social media platforms to spread political misinformation and calls to violence, and to support voter suppression.
The long-simmering issue has attracted fresh attention in wake of the Black Lives Matters protests sparked after George Floyd was killed, and as the 2020 presidential election has heated up. Facebook's inaction in these areas has been in notable contrast with Twitter (NYSE: TWTR), which recently began adding warning labels to posts from President Trump that contain questionable or false information, or violate its rules on such things as promoting violence. Facebook CEO Mark Zuckerberg, on the other hand, has consistently pushed back on demands that his company make similar efforts, saying he doesn't feel comfortable policing free speech.
Among those suspending their ad buys on Facebook are some of the biggest advertisers in the world, including Coca-Cola, PepsiCo, Unilever, Verizon, Diageo, and Starbucks. Some have been more direct about the boycott, while others have simply said they will pause advertising on social media generally. The boycott may offer some of these businesses cover to do something they were already considering for economic reasons with the global recession weighing on consumer demand and lowering the return on advertising spending.
By joining the boycott, brands can presumably earn some goodwill from the segment of the public that wants Facebook to start addressing the socially harmful content on its platform, but many of those companies genuinely support the cause.
For example, outdoor apparel and gear maker Patagonia said: "We stand with #StopHateforProfit in saying Facebook's profits will never be worth promoting hate, bigotry, racism, antisemitism, and violence." Verizon made a similar statement: "We're pausing our advertising until Facebook can create an acceptable solution that makes us comfortable and is consistent with what we've done with YouTube and other partners."
Image source: Pinterest.
Why Pinterest could be a boycott winner
Though Facebook counts on millions of advertisers, most of which are small businesses that need the social media giant more than it needs them, the boycott seems poised to put at least a modest dent in its revenues. Starbucks, for example, spent $95 million on Facebook ads last year, while Diageo poured $23 million into marketing with the social media giant. Facebook brought in nearly $70 billion in ad revenue last year, but if the boycott is sustained and grows, Facebook could be ceding billions of dollars in sales to rival advertising platforms. Pinterest (NYSE: PINS) seems like a top candidate to pick up some of that market share.
Some companies have singled out Facebook and Twitter in their statements; others have included all of social media, though it's unclear what that means or which platforms their boycotts will include. Pinterest would seem to have the cleanest reputation of any major social media platform, as the site functions more as a place to collect aspirational and fandom-related imagery rather than as a home for the mud-slinging and thirst-trapping that can characterize interactions on Facebook, Twitter, and Instagram.
Pinterest, in fact, disavows the notion that it's a social platform at all, saying that users come to it to work on themselves rather than connect with other individuals. In contrast to those other online arenas, Pinterest presents itself as a positive place, and its advertising and posting policies seem to back that up. The company doesn't allow any political advertising -- a policy that has allowed it to sidestep the controversies that have swirled around Facebook and Twitter -- and bans advertising content with vulgar or violent imagery, or that is culturally or racially divisive.
"We want Pinterest to be a welcoming, positive, and inspiring place, so we don't allow divisive or disturbing advertisements," says the company.
Pinterest's 2019 revenue was $1.14 billion -- just 1.6% of Facebook's total. In other words, what would be a sliver of Facebook's ad revenue translates into a big chunk for Pinterest. If companies like Starbucks go elsewhere with those marketing dollars and spend some with Pinterest, that would significantly move the needle on its bottom line even if it barely impacts Facebook's.
Pinterest's stock price has slid alongside Facebook's in recent days, but it seems like a mistake for investors to link the two, as advertisers are likely to distinguish between them, and Facebook's role in the political process is much different than Pinterest's.
The boycott has just started, and no one knows how long it will last or if it could lead to lasting changes in the platforms that advertisers choose to partner with, but it's developing into a potentially significant tailwind for Pinterest. As a positive, ad-friendly, user-focused platform, it looks like an excellent option for advertisers fleeing Facebook. Now it's up to Pinterest to capitalize on that opportunity.
10 stocks we like better than Facebook
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Facebook wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 2020
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jeremy Bowman owns shares of Facebook, Pinterest, and Starbucks. The Motley Fool owns shares of and recommends Facebook, Pinterest, Starbucks, and Twitter. The Motley Fool recommends Diageo and Verizon Communications. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Facebook's inaction in these areas has been in notable contrast with Twitter (NYSE: TWTR), which recently began adding warning labels to posts from President Trump that contain questionable or false information, or violate its rules on such things as promoting violence. Facebook CEO Mark Zuckerberg, on the other hand, has consistently pushed back on demands that his company make similar efforts, saying he doesn't feel comfortable policing free speech. Pinterest would seem to have the cleanest reputation of any major social media platform, as the site functions more as a place to collect aspirational and fandom-related imagery rather than as a home for the mud-slinging and thirst-trapping that can characterize interactions on Facebook, Twitter, and Instagram.
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Starbucks, for example, spent $95 million on Facebook ads last year, while Diageo poured $23 million into marketing with the social media giant. The Motley Fool owns shares of and recommends Facebook, Pinterest, Starbucks, and Twitter. The Motley Fool recommends Diageo and Verizon Communications.
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Why Pinterest could be a boycott winner Though Facebook counts on millions of advertisers, most of which are small businesses that need the social media giant more than it needs them, the boycott seems poised to put at least a modest dent in its revenues. Facebook brought in nearly $70 billion in ad revenue last year, but if the boycott is sustained and grows, Facebook could be ceding billions of dollars in sales to rival advertising platforms. Pinterest's stock price has slid alongside Facebook's in recent days, but it seems like a mistake for investors to link the two, as advertisers are likely to distinguish between them, and Facebook's role in the political process is much different than Pinterest's.
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Why Pinterest could be a boycott winner Though Facebook counts on millions of advertisers, most of which are small businesses that need the social media giant more than it needs them, the boycott seems poised to put at least a modest dent in its revenues. Some companies have singled out Facebook and Twitter in their statements; others have included all of social media, though it's unclear what that means or which platforms their boycotts will include. That's right -- they think these 10 stocks are even better buys.
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727711.0
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2020-06-30 00:00:00 UTC
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Why Are Corporates Leaving Facebook, Twitter
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DEO
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https://www.nasdaq.com/articles/why-are-corporates-leaving-facebook-twitter-2020-06-30
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In this episode of MarketFoolery, Chris Hill chats with the Fool's Maria Gallagher about the latest headlines from Wall Street. They've got some news from social media and talk about two partnerships in the athletic and fashion apparel industry and much more.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
10 stocks we like better than Walmart
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David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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Stock Advisor returns as of 2/1/20
This video was recorded on June 29, 2020.
Chris Hill: It's Monday, June 29th. Welcome to MarketFoolery. I'm Chris Hill. With me today, from our nation's capital, it's Maria Gallagher. Good to see you.
Maria Gallagher: Thanks for having me.
Hill: We've got a lot of apparel news to get to; athletic apparel, fashion apparel. We're going to start though, with the social network, because shares of Facebook (NASDAQ: FB) are down 10% over the past week as more companies have announced they are pulling their ad spend from Facebook. On the list: Starbucks, Coca-Cola, Verizon, Unilever, Diageo, Honda, Lululemon Athletica. Those are just some of the companies that are taking a break from social media advertising.
And there are a couple of things going on here, Maria. One is this movement within social media with the hashtag #StopHateForProfit that some groups have come together to form to encourage advertisers to pull their ad spend from social media platforms that they feel aren't doing a good enough job with hate speech online. So, that's part of what we're seeing with some of these advertisers. Others are just not formally joining this group, they are hitting the pause button.
And I should mention that Twitter's shares are down a little bit more than 10% over the past week as well. So, it's not just Facebook, it's social media in general. But Facebook is one of the biggest companies out there, so they are the biggest target. Therefore, a lot of the focus from this group, and others, is focused at Facebook.
Let me start with just the business question; how big a threat do you think this is right now, because it's certainly a bigger threat than it was a week ago?
Gallagher: I think that's a good question. I think thinking in context, Cambridge Analytica happened, everyone was like, is this going to be the end of Facebook? It wasn't. Now, there's this coming out. Is this going to be the end of Facebook? I think, realistically, probably not. If you're a Facebook shareholder, if you're a long-term Facebook shareholder, this is kind of something that keeps happening. Facebook and Mark Zuckerberg, I don't think have been leaders in the space of moderating hate speech the way they could have been, so I think that it's a really important thing that these advertisers are trying to use their power to have some sort of change within the platform. I mean, Facebook last year brought in almost $70 billion in ad revenue globally. They have over 8 million advertisers. So, even though they have 100 people boycotting right now, they have 799,000 waiting in the wings to take that in. And so, I think that it's an important step and the public, kind of, shame or that hashtag #StopHateForProfit, is forcing Facebook to, kind of, think through their moderating tactics a little bit more, but I don't think this is by any means the end of Facebook.
Hill: It's going to be interesting to see where this goes over the next couple of weeks because, again, a week ago, that list of names that I ticked off, I mean, Starbucks, Coca-Cola, Verizon, that's just in the last couple of days they have jumped on board to pull their ad spend. I do think, and this is something we've talked about in the past, that if you are a large business, if you're looking at where your marketing spend is going to go, you have more options than ever before. And certainly, the rise of Facebook is due in large part to their ability to deliver for advertisers. You know, more than 2 billion people are on Facebook, but all of us who are on Facebook, we're not the customers, we're the consumers and, by the way, the creators of the content on Facebook. The customer is someone who pays you, so it's those advertisers who are really the customers. So, Facebook has delivered for those advertisers.
But like I said, they have options. It also makes me think that -- you know, I was saying to you earlier today -- even if none of this was going on, even if this #StopHateForProfit group hadn't come together, it really wouldn't shock me if a couple of advertisers just said, you know what, it's a presidential election year and we just don't [laughs] want to be on social media, we're just going to be somewhere else. We have a lot of other places we can spend our money, and we're just going to take a break every four years because we just don't want to be drowned out in all of the political discussion on social media.
Gallagher: Yeah. I think it's interesting also because it's, kind of, this crazy intersection right now where a lot of companies, as stores are reopening and they're trying to revitalize their profit that they've maybe lost in the past couple of months, it's not necessarily the best time for some smaller companies to be taking a moralistic stance if they need that revenue. And as you said, Facebook has such a massive reach, it is the best way for advertisers to reach such a massive market.
And I think it's important to note that the initial group, the Anti-Defamation League, the NAACP, Sleeping Giants, Color of Change, all of those groups, they weren't saying pause forever, they were saying for the month of July. And so, I think that's an important thing to note is, they're not saying none of these advertisers will ever come back to Facebook, but I guess it's maybe the inherent threat is they're saying, well, maybe we won't ever come back, but we are taking our money out right now. So, I think there's going to be some sort of compromise, some sort of meeting in the middle, because it's really a hard-to-beat platform. Even though I follow Pinterest, and I think Pinterest is a great place for these advertisers to go, I think that they will reach some sort of conclusion that, hopefully, will be beneficial to us as the consumers and will help moderate that hate speech.
Hill: Yeah, I'm glad you mentioned Pinterest, because one of my thoughts through all of this was, boy! If you're Pinterest, you know, you got to be calling some of [laughs] these companies up and saying, hey, we're not Facebook; we're not Twitter. You know, Starbucks, Coca-Cola, come on over here, let's have a conversation.
Gallagher: Exactly. And as a Pinterest shareholder, I would love for those conversations to happen. [laughs]
Hill: Back in 2016, Under Armour (NYSE: UA) (NYSE: UAA) agreed to an apparel partnership with UCLA that, at the time, was the richest apparel deal in all of college sports. 15 years, $280 million. That was then, this is now. Under Armour says it is terminating its agreement with UCLA because it is not getting the marketing benefits it expected. UCLA responded by saying they're going to fight to keep the partnership. Where do you think this is going? Because I can see this being a negotiating tactic on Under Armour's part, I could also see this being Patrik Frisk, who's been CEO for about six months now, looking through all of the deals that Kevin Plank made and saying, you know what, some of these have got to go.
Gallagher: Yeah, I think it's probably a combo of the two. I think if it's the richest deal in history, that it's kind of an indication you've overpaid for something. And so, I think it's important to note, also this isn't the first time Under Armour has done something like this. In 2016, they signed on to become Major League Baseball's on field jersey supplier, but then that fell apart in 2018 due to money concerns; and Nike swooped in.
So, I don't think that Under Armour has a history of great capital allocation. They spend so much money trying to pivot to become a tech company by buying MyFitnessPal. So, I think a good part of it is maybe management trying to prioritize capital allocation and saying, listen, we're in a time right now where we haven't benefited from athleisure or because we refuse to really get into athleisure; we haven't benefited from all of these trends that we could have; and we've paid money we shouldn't have and we need to really get it together.
Hill: Under Armour, like Nike, has apparel deals with dozens and dozens of colleges and universities, including some pretty small ones, like, division 2 and 3 schools. So, you know, not every deal is of this size. When I first -- and I say this as an [laughs] Under Armour shareholder -- when I first saw this story over the weekend, I thought, boy! That's a lot of money [laughs] for UCLA. And not to knock UCLA, but it's not -- over the past, I would say, decade or so, it really hasn't been at that level for, in particular, men's basketball and for football. In the past, UCLA has been that type of program for those two sports.
But, you know, you think about like a University of Michigan or Ohio State or something like that where they really are dominating at that level. And you know, you could see them shelling out that kind of money for, what is widely considered to be maybe, like, a top five brand in terms of the major sports. So, you know, they're not going to be getting out of this business altogether, that wouldn't make any sense at all, but, yeah, this is [laughs] just one ...
Gallagher: ... maybe they'll stop overpaying. [laughs]
Hill: Well, yeah. And you mentioned, you know -- and thank you for mentioning the MyFitness app deal, because I had gone at least a couple of weeks without thinking about it. But, yeah, the $700 million that they spent on MyFitness app, which was a head scratcher at the time. You know, maybe this is part of the turnaround plan that Frisk is trying to engineer; unfortunately, [laughs] it's happening during a pandemic. But you know, if he can show some progress over the next couple of years, maybe there's a light at the end of the tunnel for Under Armour and beleaguered shareholders like myself. But, holy cow! This was just so much money to shell out for UCLA.
Gallagher: Yeah, I definitely think UCLA got the better end of that deal.
Hill: Shares of Gap (NYSE: GPS) are up more than 20% in the past two days on the news that Gap is teaming up with Kanye West to develop a clothing line for men, women and children. Speaking of multi-year deals, this is a 10-year deal. There's the potential for some equity to change hands here, depending on how this deal goes, it's going to launch in 2021. Are you surprised that shares of Gap popped that much in just two days or, as someone who is much more connected with not only the Gap, but popular culture than I am, do you look at this and say, yeah, this makes sense to me?
Gallagher: I think that the deal makes sense, I don't necessarily think the pop makes sense, because I think the deal, it's actually really interesting to me. So, Kanye West actually worked at a Gap in Chicago when he lived on the South Side, so I think that it's kind of nice that he keeps saying, he's so excited to go back to the store he once worked at. So, I think that's kind of a nice little tie-in, but I think Gap is hoping that Kanye West can do for them what he did for adidas with his Yeezy sneakers. But the thing is, the model with adidas was so different, because it started on being so exclusive, and the Gap's model isn't one of exclusivity.
So, I think that they're trying to plan, because they're planning that this Kanye West clothing will sell about $1 billion in sales and five years from now, it will be $1 billion of sales, which he's just done with the Yeezy sneakers, which has taken about seven years. So, it's a very, very optimistic plan, in my opinion, of the Gap. But I think it makes sense, and I think that it'll be interesting to see what his clothing looks like. I don't know if you've ever seen Kanye West's clothing line, it's basically all tan ...
Hill: Let's just assume that I haven't.
Gallagher: It's all tan and monochrome and, kind of, just looks likes SPANX in full clothing, so I'm intrigued to see if he revamps or recolors it [laughs] for the Gap, because I don't know anyone who would be like, what a good deal, let me spend $400 on this tan jumpsuit.
Hill: $1 billion in revenue, I get that we're talking about five years from now, but when you consider that as a public company, with this 20% pop, Gap's market cap is about $4.5 billion, so, this is one of those deals that if it actually works out in their favor then whatever Kanye West end of the deal is, it's going to be worth it if they can actually get to that $1 billion in revenue off of this new clothing line, which isn't going to launch until 2021.
Gallagher: Yeah. And I mean, Yeezys, the sneaker side is valued at $3 billion right now, they are thinking $1.3 billion of sales last year through adidas. So, Gap is just really hoping he can do the same with clothing, but I think clothing is a lot harder to do, and like I said, it doesn't work within that exclusivity model that the sneakers have worked so well in with that resale model being pretty lucrative for, like, sneakerheads.
Hill: Do you think this is something that could extend to other lines of Gap's business? I mean, they've been very clear, look, this is going to be in stores, we're going to be selling this online. Obviously, Kanye West is going to be promoting this himself. I'm just curious, you know, to your point about the exclusivity, because you're right, Gap didn't make its bones by being [laughs] an exclusive brand. That said, I could see maybe some of this being just exclusive to Banana Republic.
Gallagher: Yeah, maybe he could do some sort of athleisure with Athleta, that could be kind of interesting. He seems really all in, like, Kanye West seems jazzed about it, so I think that it will be lucrative for the Gap, I just don't know if it'll be quite as lucrative as they're planning for it to be. Seems like they're really relying on it.
Hill: Maria Gallagher, thanks for being here.
Gallagher: Thanks for having me.
Hill: As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.
That's going to do it for this edition of MarketFoolery. The show is mixed by Austin Morgan, I'm Chris Hill, thanks for listening, and we'll see you tomorrow.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Chris Hill owns shares of Starbucks, Under Armour (A Shares), and Under Armour (C Shares). Maria Gallagher has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook, Lululemon Athletica, Nike, Starbucks, Twitter, Under Armour (A Shares), and Under Armour (C Shares). The Motley Fool recommends Diageo and Verizon Communications. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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A full transcript follows the video. See the 10 stocks Stock Advisor returns as of 2/1/20 This video was recorded on June 29, 2020. In this episode of MarketFoolery, Chris Hill chats with the Fool's Maria Gallagher about the latest headlines from Wall Street.
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A full transcript follows the video. See the 10 stocks Stock Advisor returns as of 2/1/20 This video was recorded on June 29, 2020. On the list: Starbucks, Coca-Cola, Verizon, Unilever, Diageo, Honda, Lululemon Athletica.
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A full transcript follows the video. See the 10 stocks Stock Advisor returns as of 2/1/20 This video was recorded on June 29, 2020. It also makes me think that -- you know, I was saying to you earlier today -- even if none of this was going on, even if this #StopHateForProfit group hadn't come together, it really wouldn't shock me if a couple of advertisers just said, you know what, it's a presidential election year and we just don't [laughs] want to be on social media, we're just going to be somewhere else.
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A full transcript follows the video. See the 10 stocks Stock Advisor returns as of 2/1/20 This video was recorded on June 29, 2020. You know, more than 2 billion people are on Facebook, but all of us who are on Facebook, we're not the customers, we're the consumers and, by the way, the creators of the content on Facebook.
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2020-06-30 00:00:00 UTC
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Microsoft Reportedly Cuts Facebook/Instagram Advertising
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DEO
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https://www.nasdaq.com/articles/microsoft-reportedly-cuts-facebook-instagram-advertising-2020-06-30
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Microsoft (NASDAQ: MSFT) is part of a rapidly growing list of big companies pulling their advertising from Facebook (NASDAQ: FB) and its photo-sharing site Instagram, various reports in the media have revealed.
Axios broke the story Monday, citing an internal Microsoft chat transcript it had obtained access to. It quoted the tech giant's chief marketing officer, Chris Capossela, as writing that "[b]ased on concerns we had back in May we suspended all media spending on Facebook/Instagram in the US and we've subsequently suspended all spending on Facebook/Instagram worldwide."
The exact nature of Microsoft's concerns was not specified, although in the transcript, it cited examples of what it considers "inapprop
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Microsoft (NASDAQ: MSFT) is part of a rapidly growing list of big companies pulling their advertising from Facebook (NASDAQ: FB) and its photo-sharing site Instagram, various reports in the media have revealed. Axios broke the story Monday, citing an internal Microsoft chat transcript it had obtained access to. The exact nature of Microsoft's concerns was not specified, although in the transcript, it cited examples of what it considers "inapprop
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Microsoft (NASDAQ: MSFT) is part of a rapidly growing list of big companies pulling their advertising from Facebook (NASDAQ: FB) and its photo-sharing site Instagram, various reports in the media have revealed. It quoted the tech giant's chief marketing officer, Chris Capossela, as writing that "[b]ased on concerns we had back in May we suspended all media spending on Facebook/Instagram in the US and we've subsequently suspended all spending on Facebook/Instagram worldwide." The exact nature of Microsoft's concerns was not specified, although in the transcript, it cited examples of what it considers "inapprop
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Microsoft (NASDAQ: MSFT) is part of a rapidly growing list of big companies pulling their advertising from Facebook (NASDAQ: FB) and its photo-sharing site Instagram, various reports in the media have revealed. Axios broke the story Monday, citing an internal Microsoft chat transcript it had obtained access to. It quoted the tech giant's chief marketing officer, Chris Capossela, as writing that "[b]ased on concerns we had back in May we suspended all media spending on Facebook/Instagram in the US and we've subsequently suspended all spending on Facebook/Instagram worldwide."
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Microsoft (NASDAQ: MSFT) is part of a rapidly growing list of big companies pulling their advertising from Facebook (NASDAQ: FB) and its photo-sharing site Instagram, various reports in the media have revealed. Axios broke the story Monday, citing an internal Microsoft chat transcript it had obtained access to. It quoted the tech giant's chief marketing officer, Chris Capossela, as writing that "[b]ased on concerns we had back in May we suspended all media spending on Facebook/Instagram in the US and we've subsequently suspended all spending on Facebook/Instagram worldwide."
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727713.0
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2020-06-29 00:00:00 UTC
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Facebook Bows to Ad Boycotts and Will Block Certain Content
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https://www.nasdaq.com/articles/facebook-bows-to-ad-boycotts-and-will-block-certain-content-2020-06-29
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Amid a public outcry and a growing boycott by companies that advertise on its platform, Facebook (NASDAQ: FB) said it will begin to block content that violates the company's policies. In a post to his Facebook page on Friday, CEO Mark Zuckerberg shared new measures designed, as he said, "to connect people with authoritative information about voting, crack down on voter suppression, and fight hate speech."
Zuckerberg also said Facebook would take down any post that incites violence or suppresses voting. "Even if a politician or government official says it, if we determine that content may lead to violence or deprive people of their right to vote, we will take that content down," he said. The company plans to label certain other posts that it deems "newsworthy" that might otherwise violate its policies.
Facebook CEO Mark Zuckerberg. Image source: Facebook.
In recent days, more than 90 marketers have joined a boycott of Facebook -- the "Stop Hate For Profit" campaign -- originally organized by the Anti-Defamation League, the NAACP, and other civil rights groups. The groups criticized Facebook for not providing more robust fact-checking and for failing to remove political posts containing false or misleading information. The platform has also been accused of being too lax on combating hate speech and not labeling inflammatory posts.
The campaign seemed to hit a turning point late last week when a number of high-profile advertisers, including consumer goods giant Unilever (NYSE: UL), Coca-Cola (NYSE: KO), and Verizon (NYSE: VZ), joined the boycott. The defections continued over the weekend as Starbucks (NASDAQ: SBUX) and Diageo (NYSE: DEO) joined in.
In a statement on the company's website, Starbucks said, "We will pause advertising on all social media platforms while we continue discussions internally, with our media partners and with civil rights organizations in the effort to stop the spread of hate speech."
10 stocks we like better than Facebook
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Facebook wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 2020
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Danny Vena owns shares of Facebook and Starbucks. The Motley Fool owns shares of and recommends Facebook and Starbucks. The Motley Fool recommends Diageo and Verizon Communications. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The defections continued over the weekend as Starbucks (NASDAQ: SBUX) and Diageo (NYSE: DEO) joined in. In a post to his Facebook page on Friday, CEO Mark Zuckerberg shared new measures designed, as he said, "to connect people with authoritative information about voting, crack down on voter suppression, and fight hate speech." In recent days, more than 90 marketers have joined a boycott of Facebook -- the "Stop Hate For Profit" campaign -- originally organized by the Anti-Defamation League, the NAACP, and other civil rights groups.
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The defections continued over the weekend as Starbucks (NASDAQ: SBUX) and Diageo (NYSE: DEO) joined in. In recent days, more than 90 marketers have joined a boycott of Facebook -- the "Stop Hate For Profit" campaign -- originally organized by the Anti-Defamation League, the NAACP, and other civil rights groups. The Motley Fool owns shares of and recommends Facebook and Starbucks.
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The defections continued over the weekend as Starbucks (NASDAQ: SBUX) and Diageo (NYSE: DEO) joined in. Amid a public outcry and a growing boycott by companies that advertise on its platform, Facebook (NASDAQ: FB) said it will begin to block content that violates the company's policies. In a post to his Facebook page on Friday, CEO Mark Zuckerberg shared new measures designed, as he said, "to connect people with authoritative information about voting, crack down on voter suppression, and fight hate speech."
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The defections continued over the weekend as Starbucks (NASDAQ: SBUX) and Diageo (NYSE: DEO) joined in. In a statement on the company's website, Starbucks said, "We will pause advertising on all social media platforms while we continue discussions internally, with our media partners and with civil rights organizations in the effort to stop the spread of hate speech." See the 10 stocks *Stock Advisor returns as of June 2, 2020 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors.
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727714.0
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2020-06-29 00:00:00 UTC
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Technology Sector Update for 06/29/2020: FB, KO, DEO, UN, UL, SBUX, LEVI, NOK, WEX, XLK, SOXX
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DEO
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https://www.nasdaq.com/articles/technology-sector-update-for-06-29-2020%3A-fb-ko-deo-un-ul-sbux-levi-nok-wex-xlk-soxx-2020
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Technology firms were advancing pre-bell Monday, with the Technology Select Sector SPDR ETF (XLK) up 0.21% and the Semiconductor Sector Index Fund (SOXX) gaining 0.16% in recent trading.
Facebook (FB) was declining by over 3% as more companies join a campaign to stop advertising on the social media giant's platforms amid its lack of action towards hate speech and racism. The firms include Coca-Cola Co. (KO), spirits maker Diageo (DEO), Unilever (UL, UN), Starbucks (SBUX) and Levi Strauss & Co. (LEVI).
Nokia (NOK) was advancing by more than 1% after saying it was chosen as the sole supplier of Taiwan Mobile's 5G network in a three-year framework deal worth approximately EUR400 million ($450 million).
WEX (WEX) was gaining over 1% in value after saying it agreed to a $400 million dollar investment from an affiliate of Warburg Pincus.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The firms include Coca-Cola Co. (KO), spirits maker Diageo (DEO), Unilever (UL, UN), Starbucks (SBUX) and Levi Strauss & Co. (LEVI). Technology firms were advancing pre-bell Monday, with the Technology Select Sector SPDR ETF (XLK) up 0.21% and the Semiconductor Sector Index Fund (SOXX) gaining 0.16% in recent trading. Facebook (FB) was declining by over 3% as more companies join a campaign to stop advertising on the social media giant's platforms amid its lack of action towards hate speech and racism.
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The firms include Coca-Cola Co. (KO), spirits maker Diageo (DEO), Unilever (UL, UN), Starbucks (SBUX) and Levi Strauss & Co. (LEVI). Technology firms were advancing pre-bell Monday, with the Technology Select Sector SPDR ETF (XLK) up 0.21% and the Semiconductor Sector Index Fund (SOXX) gaining 0.16% in recent trading. Nokia (NOK) was advancing by more than 1% after saying it was chosen as the sole supplier of Taiwan Mobile's 5G network in a three-year framework deal worth approximately EUR400 million ($450 million).
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The firms include Coca-Cola Co. (KO), spirits maker Diageo (DEO), Unilever (UL, UN), Starbucks (SBUX) and Levi Strauss & Co. (LEVI). Technology firms were advancing pre-bell Monday, with the Technology Select Sector SPDR ETF (XLK) up 0.21% and the Semiconductor Sector Index Fund (SOXX) gaining 0.16% in recent trading. Facebook (FB) was declining by over 3% as more companies join a campaign to stop advertising on the social media giant's platforms amid its lack of action towards hate speech and racism.
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The firms include Coca-Cola Co. (KO), spirits maker Diageo (DEO), Unilever (UL, UN), Starbucks (SBUX) and Levi Strauss & Co. (LEVI). Technology firms were advancing pre-bell Monday, with the Technology Select Sector SPDR ETF (XLK) up 0.21% and the Semiconductor Sector Index Fund (SOXX) gaining 0.16% in recent trading. Facebook (FB) was declining by over 3% as more companies join a campaign to stop advertising on the social media giant's platforms amid its lack of action towards hate speech and racism.
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2020-06-24 00:00:00 UTC
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$3.1 Billion in New EU Consumer Goods Tariffs to Further Escalate Trade War
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https://www.nasdaq.com/articles/%243.1-billion-in-new-eu-consumer-goods-tariffs-to-further-escalate-trade-war-2020-06-24
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Although consumers have likely forgotten the ongoing tit-for-tat trade war with Europe because of the coronavirus pandemic and the deescalation of trade tensions with China, a new round of tariffs on EU consumer goods will remind them this particular battle is still hot.
The U.S. Trade Representative is proposing the imposition of duties on as much as $3.1 billion worth of products, including pork, Irish whiskey, beer, olive oil, cheese, leather goods, and more.
Image source: Getty Images.
A game nobody wins
The roots of the ongoing trade battle stretch back 15 years to competing complaints before the World Trade Organization that the EU and the U.S. both illegally prop up Airbus and Boeing (NYSE: BA) with illegal subsidies. The WTO ruled in the U.S. favor last October and is expected to give the EU a similar victory next month.
It is a separate spat from the steel and aluminum tariffs President Trump imposed two years ago that led to retaliatory tariffs on goods such as American whiskey and motorcycles, duties that were designed to hit Brown-Forman's (NYSE: BF.A)(NYSE: BF.B) Jack Daniel's and Harley-Davidson (NYSE: HOG). U.S. distillers have lost some $337 million in sales because of the tariffs.
The latest duties could hurt international stocks, including distiller Diageo (NYSE: DEO) hard as it imports a range of spirits including Johnnie Walker scotch whisky, Tanqueray gin, and Smirnoff vodka, and LVMH Moet Hennessy Louis Vuitton (OTC: LVMUY), which makes a broad array of targeted goods.
The U.S. is using what it calls "carousel retaliation," which means it rotates the goods it targets for tariffs. The Trump administration says the purpose of the tariffs is to get the EU to negotiate a settlement and it has not imposed the full measure of duties that it could, rather only about half.
10 stocks we like better than Diageo
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Diageo wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 2020
Rich Duprey has no position in any of the stocks mentioned. The Motley Fool recommends Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The latest duties could hurt international stocks, including distiller Diageo (NYSE: DEO) hard as it imports a range of spirits including Johnnie Walker scotch whisky, Tanqueray gin, and Smirnoff vodka, and LVMH Moet Hennessy Louis Vuitton (OTC: LVMUY), which makes a broad array of targeted goods. The U.S. Trade Representative is proposing the imposition of duties on as much as $3.1 billion worth of products, including pork, Irish whiskey, beer, olive oil, cheese, leather goods, and more. The Trump administration says the purpose of the tariffs is to get the EU to negotiate a settlement and it has not imposed the full measure of duties that it could, rather only about half.
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The latest duties could hurt international stocks, including distiller Diageo (NYSE: DEO) hard as it imports a range of spirits including Johnnie Walker scotch whisky, Tanqueray gin, and Smirnoff vodka, and LVMH Moet Hennessy Louis Vuitton (OTC: LVMUY), which makes a broad array of targeted goods. Although consumers have likely forgotten the ongoing tit-for-tat trade war with Europe because of the coronavirus pandemic and the deescalation of trade tensions with China, a new round of tariffs on EU consumer goods will remind them this particular battle is still hot. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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The latest duties could hurt international stocks, including distiller Diageo (NYSE: DEO) hard as it imports a range of spirits including Johnnie Walker scotch whisky, Tanqueray gin, and Smirnoff vodka, and LVMH Moet Hennessy Louis Vuitton (OTC: LVMUY), which makes a broad array of targeted goods. It is a separate spat from the steel and aluminum tariffs President Trump imposed two years ago that led to retaliatory tariffs on goods such as American whiskey and motorcycles, duties that were designed to hit Brown-Forman's (NYSE: BF.A)(NYSE: BF.B) Jack Daniel's and Harley-Davidson (NYSE: HOG). See the 10 stocks *Stock Advisor returns as of June 2, 2020 Rich Duprey has no position in any of the stocks mentioned.
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The latest duties could hurt international stocks, including distiller Diageo (NYSE: DEO) hard as it imports a range of spirits including Johnnie Walker scotch whisky, Tanqueray gin, and Smirnoff vodka, and LVMH Moet Hennessy Louis Vuitton (OTC: LVMUY), which makes a broad array of targeted goods. 10 stocks we like better than Diageo When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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2020-06-23 00:00:00 UTC
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4 Recession-Proof Stocks to Buy Now
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https://www.nasdaq.com/articles/4-recession-proof-stocks-to-buy-now-2020-06-23
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
A recession is generally defined as two straight quarters of declines in gross domestic product (GDP). In other words, if an economy contracts over six months, then it is said to be in a recession. Earlier in June, the National Bureau of Economic Research announced that the U.S. economy is officially in a recession. Therefore today, I’d like to discuss three recession-proof stocks to buy for long-term portfolios.
Over the past several weeks, most states have been opening up their economies. Yet, recent headlines suggest that several of the states that have been the first ones to lift lockdown restrictions are now reporting an increase in the number of novel coronavirus cases. Thus investors are increasingly nervous about the adverse health and economic effects of the pandemic.
Sanjiv Sabherwal, Goolsby-Fouse Endowed Chair and Professor of Finance, University of Texas at Arlington, says:
“I believe we need to maintain a balance between opening the economy and controlling the spread of the virus. If we open the economy too fast and without businesses, other organizations, and people following the best practices that inhibit the proliferation of the coronavirus, we run the risk of a surge in the virus and having to shut down again. On the other hand, we cannot afford to have the economy closed for a very long time.”
While authorities work to strike the right balance between the level of restrictions and how soon life can go back to normal, investors wonder how they can recession-proof their portfolios.
In investing, risk and return go together. And diversification is all about reducing risk. Although it’ll not eliminate all the risks in your equity portfolio, your long-term risk/return ratio is likely to be more attractive. That is especially important in a recession.
Once market participants have decided how much of their wealth they’d like to have in equities, they should ideally consider allocating the sum among different types of shares.
Certain industries and stocks tend to do better during recessions. Defensive shares may help investors protect their capital and still get acceptable returns, especially in times of economic uncertainty. If they also provide robust dividends, it’s the icing on the cake. Receiving regular dividends enables investors to have a constant stream of passive income.
For starters, food manufacturers and supermarkets, which are consumer staples, are generally resilient. After all, no matter how bad the economy is, we’ll all have to eat and buy household goods as well as personal hygiene items.
Other defensive shares may also be appropriate for a recession. For example, healthcare companies and utilities are also among defensive shares.
Besides, a large number of investors regard commodities and especially gold as “safe havens” during financial struggles. When the price of gold increases, gold mining companies usually have a bright time too.
7 of the Best Penny Stocks to Buy Now
With that in mind, here are four recession-proof stocks that you may want to research further:
Archer-Daniels-Midland (NYSE:ADM)
Diageo (NYSE:DEO)
Procter & Gamble (NYSE:PG)
Walmart (NYSE:WMT)
Let’s dive a bit deeper into what makes each a safer bet than some of the other stocks on the market right now.
Recession-Proof Stocks to Buy: Archer-Daniels-Midland (ADM)
ADM)" width="300" height="169">
Source: Katherine Welles / Shutterstock.com
Current Price: $40.48
52-week Price Range: $28.92-$47.20
Current Dividend Yield: 3.56%
Chicago, Illinois-based Archer Daniels Midland is the world’s premier agricultural origination and processing company. It was incorporated in 1923, as successor to the Daniels Linseed Co. founded in 1902.
Today, it is one of the world’s leading producers of ingredients for human and animal nutrition, including proteins, flavors, colors, flours and fibers. It operates a global grain transportation network to purchase, store and transport agricultural raw materials, such as oilseeds, corn, wheat, milo, oats and barley.
In late April, the group released Q1 earnings that beat estimates. Quarterly earnings per share came in at 64 cents compared to earnings of 46 cents per share a year ago. However, revenue of $14.97 billion for the quarter ended March 2020 was less than the year-ago revenue of $15.30 billion.
The group reports revenue in three main segments:
Ag Services & Oilseeds (delivered results that were in line with the year-ago period)
Carbohydrate Solutions (results were lower than the first quarter of 2019)
Nutrition (results were substantially higher YoY)
ADM is a firm that feeds the world. The group is likely to survive an economic downturn. It should also survive a second Covid-19 outbreak globally if this occurs. Its strong portfolio and global outreach with a respectable dividend yield makes ADM stock one of the best recession-proof stocks to buy.
Diageo (DEO)
DEO)" width="300" height="169">
Source: IgorGolovniov / Shutterstock.com
Current Price: $140.90
52-week Price Range: $100.52-$176.22
Current Dividend Yield: 2.45%
Diageo, the global spirits maker and brewer, has diverse global exposure and brand portfolio. Such geographic diversification — especially into emerging economies, where consumers are increasingly showing brand loyalty — is likely to provide a relatively defensive investment opportunity for a retirement portfolio.
The company has over 200 strong brands, including Baileys, Don Julio, Guinness, Johnnie Walker and Smirnoff. These well-known names contribute to increased volume growth and give Diageo pricing and competitive power.
An April trading update by the company highlighted that “[s]ocial distancing measures, including the closure of the on-trade channels, have been introduced in most of our markets.” For example, on-trade sales account for about 50% and 20% of total revenue in Europe and the U.S., respectively.
The closure of restaurants and bars has led to a decline in trade sales. At the time, China was the only main market where it was “beginning to see a very slow return of on-trade consumption, as restaurants and bars have started to gradually re-open.” On the other hand, retail alcohol sales have seen a boost during lockdowns around the world.
10 Hot Stocks Young Investors Bought as Coronavirus Hit
So far, DEO stock is down about 16% in 2020. I believe the decline in price reflects most of the bad news so far. In addition to reliable dividends, DEO stock offers investors long-term growth potential, especially as it grows in emerging markets. I’d buy the dips.
Procter & Gamble (PG)
PG)" width="300" height="169">
Source: Jonathan Weiss / Shutterstock.com
Current Price: $118.95
52-week Price Range: $94.34-$128.09
Current Dividend Yield: 2.66%
Procter & Gamble provides branded packaged goods to consumers worldwide. Several of these well-known brands include Ariel, Bounty, Charmin, Febreze, Olay, Oral-B and Pampers.
In mid-April, the group released Q3 FY20 results. Adjusted earnings came at $1.17 per share on revenue of $17.21 billion. U.S. consumers stocked up, especially on staples and hygiene essentials.
Organic revenue, which takes out the impact of foreign currency, divestitures and acquisitions, rose 6% during the quarter. The consumer products giant reports revenue in five segments:
Beauty (organic sales increased by 1% YoY)
Grooming (organic sales decreased by 1% YoY)
Health Care (organic sales increased by 9% YoY)
Fabric & Home Care (organic sales increased by 10% YoY)
Baby, Feminine & Family Care (organic sales increased by 7% YoY)
Management believes the Covid-19 pandemic could bring about permanent changes in consumer behavior when it comes to certain products. Chief Financial Officer Jon Moeller said, “[w]e will serve what will likely become a forever altered health hygiene and cleaning focus for consumers who use our products daily or multiple times each day.”
At the end of the quarterly report, the group cut its revenue forecast for fiscal 2020, citing headwinds from foreign currency fluctuations. However, the board hiked its dividend for the 64th consecutive year, giving a 6% increase.
Year to date, PG stock is down about 4%. Procter & Gamble is a stock with staying power, especially in times when economies may contract. Therefore, it deserves a place on your radar for recession-proof stocks to buy.
Walmart (WMT)
WMT)" width="300" height="169">
Source: Jonathan Weiss / Shutterstock.com
Current Price: $118.25
52-week Price Range: $102-$133.38
Current Dividend Yield: 1.83%
Walmart is the largest retailer in the world, which makes it one of the most recession-proof stocks to consider. This is especially true when you consider that each week, over 260 million customers shop at 11,500 stores in 27 countries as well as on e-commerce websites. Although Walmart has an all-American reputation, over half the stores are located outside the U.S. It is also the largest employer in Fortune 500.
Over a decade ago, Walmart became a clear beneficiary of changes in consumer spending during the Great Recession’s economic headwinds. And WMT stock has reflected this shopping shift. In January 2010, WMT shares were hovering at $50. Now, they are over $118. Put another way, if you had invested $1,000 in the company in early 2009, you would now have over $2,300. And that does not include any dividend income you’d have received.
Therefore, if the current economic contraction were to continue, then investors can potentially expect consumers to minimize expenses by shopping at discount retailers such as Walmart.
In mid-May, Walmart released robust Q1 FY21 results. Quarterly earnings came at $1.18 per share on revenue of $134.62 billion. The group has kept its doors open for business throughout the coronavirus outbreak. E-commerce sales in the U.S. grew by 74% and its same-store sales jumped by 10% in the first quarter as shoppers stocked up due to the lockdown.
Investors were also pleased to see that during the quarter group’s operating expenses as a percentage of revenue fell significantly. Operating expenses accounted for 20.3% of Walmart’s revenue last quarter, versus 20.9% a year ago.
In recent days, the company announced a partnership with Shopify (NYSE:SHOP) whereby the latter’s merchant clients will be able to sell their products directly on Walmart’s third-party marketplace.
7 of the Best Penny Stocks to Buy Now
The group is expected to release earnings next on Aug. 18. WMT stock is flat YTD. I regard it as a stable company for conservative income and total return investors. If you are looking for recession-proof stocks to buy, you may want to consider the retailing giant.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education, including a Ph.D. in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation. As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities.
The post 4 Recession-Proof Stocks to Buy Now appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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7 of the Best Penny Stocks to Buy Now With that in mind, here are four recession-proof stocks that you may want to research further: Archer-Daniels-Midland (NYSE:ADM) Diageo (NYSE:DEO) Procter & Gamble (NYSE:PG) Walmart (NYSE:WMT) Let’s dive a bit deeper into what makes each a safer bet than some of the other stocks on the market right now. Diageo (DEO) DEO)" width="300" height="169"> Source: IgorGolovniov / Shutterstock.com Current Price: $140.90 52-week Price Range: $100.52-$176.22 Current Dividend Yield: 2.45% Diageo, the global spirits maker and brewer, has diverse global exposure and brand portfolio. 10 Hot Stocks Young Investors Bought as Coronavirus Hit So far, DEO stock is down about 16% in 2020.
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7 of the Best Penny Stocks to Buy Now With that in mind, here are four recession-proof stocks that you may want to research further: Archer-Daniels-Midland (NYSE:ADM) Diageo (NYSE:DEO) Procter & Gamble (NYSE:PG) Walmart (NYSE:WMT) Let’s dive a bit deeper into what makes each a safer bet than some of the other stocks on the market right now. Diageo (DEO) DEO)" width="300" height="169"> Source: IgorGolovniov / Shutterstock.com Current Price: $140.90 52-week Price Range: $100.52-$176.22 Current Dividend Yield: 2.45% Diageo, the global spirits maker and brewer, has diverse global exposure and brand portfolio. 10 Hot Stocks Young Investors Bought as Coronavirus Hit So far, DEO stock is down about 16% in 2020.
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7 of the Best Penny Stocks to Buy Now With that in mind, here are four recession-proof stocks that you may want to research further: Archer-Daniels-Midland (NYSE:ADM) Diageo (NYSE:DEO) Procter & Gamble (NYSE:PG) Walmart (NYSE:WMT) Let’s dive a bit deeper into what makes each a safer bet than some of the other stocks on the market right now. Diageo (DEO) DEO)" width="300" height="169"> Source: IgorGolovniov / Shutterstock.com Current Price: $140.90 52-week Price Range: $100.52-$176.22 Current Dividend Yield: 2.45% Diageo, the global spirits maker and brewer, has diverse global exposure and brand portfolio. 10 Hot Stocks Young Investors Bought as Coronavirus Hit So far, DEO stock is down about 16% in 2020.
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7 of the Best Penny Stocks to Buy Now With that in mind, here are four recession-proof stocks that you may want to research further: Archer-Daniels-Midland (NYSE:ADM) Diageo (NYSE:DEO) Procter & Gamble (NYSE:PG) Walmart (NYSE:WMT) Let’s dive a bit deeper into what makes each a safer bet than some of the other stocks on the market right now. Diageo (DEO) DEO)" width="300" height="169"> Source: IgorGolovniov / Shutterstock.com Current Price: $140.90 52-week Price Range: $100.52-$176.22 Current Dividend Yield: 2.45% Diageo, the global spirits maker and brewer, has diverse global exposure and brand portfolio. 10 Hot Stocks Young Investors Bought as Coronavirus Hit So far, DEO stock is down about 16% in 2020.
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de8c7166-5410-435f-bab5-f145c9bf6e06
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727717.0
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2020-05-19 00:00:00 UTC
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5 Sin Stocks to Buy to Profit From Pent-Up Desires
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DEO
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https://www.nasdaq.com/articles/5-sin-stocks-to-buy-to-profit-from-pent-up-desires-2020-05-19
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
In today’s uncertain stock market, should you consider “sin stocks?” I’m talking about stocks in the alcohol, gambling and tobacco industries. And while these industries have their respective controversies, there may be good reason to consider them strong buys. Sure, they aren’t “socially responsible.” Yet, what these stocks lack in terms of “good behavior,” they more than make up for in delivering shareholder value.
How so? Firstly, consistent-cash flow generation. This means high dividend payouts, making them a great choice for a income investor’s portfolio. Secondly, they are typically recession-resistant. In tough times, people don’t cut back on their vices.
Thirdly, today’s unique circumstances could mean decent upside in sin stocks in the near-term. The novel coronavirus has kept millions stuck at home. In other words, a captive audience for alcohol and cigarette sales.
Granted, forced closures of casinos hasn’t been good for gambling stocks. Neither has the hiatus in sports, curtailing America’s burgeoning sports betting market. Yet, there’s plenty of pent up desire among gamblers from coast-to-coast. That said, expect this industry to rebound with a vengeance.
7 Financial Stocks with Dependable Dividends
So, which these factors in mind, what are some top sin stocks to buy? Here are five names to consider:
Altria Group (NYSE:MO)
Constellation Brands (NYSE:STZ)
Diageo (NYSE:DEO)
MGM Resorts (NYSE:MGM)
Molson Coors (NYSE:TAP)
These five names offers both healthy dividend yields, along with beaten-down share prices due to the pandemic. In other words, potential for gains in the short-term and long-term. Therefore, as the coronavirus winds down, consider now a great time to buy these names ahead of Americans “returning to normal” and all that entails.
Sin Stocks to Buy: Altria Group (MO)
Source: Kristi Blokhin / Shutterstock.com
Altria Group may not be a household name, but you’re probably familiar with their flagship business — Phillip Morris USA. The producers of America’s top cigarette brand, Marlboro, Altria has been one of the most controversial stocks out there. And one of the most lucrative ones to own.
In the past few decades, MO stock has delivered above-average returns for investors. Partially due to the company’s high-margin business, which has resulted in consistent cash flow for dividends. But also, multiple expansion as the tobacco industry settled its legal liabilities.
With this in mind, you may think its too late to ride the big tobacco train. However, as Altria has dipped from above $50 per share in January to around $37.50 per share today, it may be a strong buy on the pullback.
For one thing, MO stock now sports a high 9.2% dividend yield. This may mean investors are skeptical of the tobacco industry’s future prospects. However, this high-yield may be more than enough to counter these risks.
Also, the company has exposure to another growing “sin” industry. Through the company’s investment in pot stock Cronos Group (NASDAQ:CRON), they could see additional upside if marijuana legalization continues in the United States.
Put it all together, and MO stock should be top of mind for any sin stock portfolio.
Constellation Brands (STZ)
Source: ShinoStock / Shutterstock.com
Purveyors of Corona and Modelo beers — along with Robert Mondavi wines — this adult beverage giant is another solid choice for a sin stock portfolio.
Sure, the pandemic has hurt this business a bit. Between bars and outdoor venues being closed, and supply issues from its Mexican beer brands, there’s good reason why STZ stock hasn’t bounced back to their 52-week highs.
Yet, this recent pullback may give you a strong entry point. Shares should bounce back once the pandemic is in the rear-view mirror. Also, like Altria, Constellation offers you exposure to the marijuana legalization trend.
Through the company’s large investment in Canopy Growth (NYSE:CGC), STZ stock could see tremendous upside if cannabis legalization extends from Canada over to the United States. Offering a modest dividend of 1.9%, you can get paid while you wait for this catalyst to take off.
5 Stocks to Buy With Heavy Insider Buying in May
Sure, buying pot stocks directly may offer greater potential gains. But with the relatively-stable liquor business backing it up, consider STZ stock a cautious way to play that trend.
Diageo (DEO)
DEO)" width="300" height="169">
Source: Shutterstock
A global beer and spirits purveyor, think of DEO stock as a fully-stocked bar. With a rich portfolio of brands, including Johnnie Walker, Smirnoff and Guinness, they hold a commanding share of the top-shelf liquor market. Liquor sales have seen a boost thanks to the lockdowns. But a short-term bump-up in sales isn’t the only reason to consider this alcohol giant a buy.
Firstly, buying liquor stocks in a downturn can be a strong entry point. While alcohol is seen as a recession resistant industry, premium purveyors like this company do see hiccups from a recessionary environment. However, given their resilience relative to more cyclical industries, buying on these dips may be a shrewd move.
Also, DEO stock sports a decent 2% dividend. Sure, not as “high-yield” as say Altria stock, but it’s still a solid choice in today’s low-interest environment. To top it all off, the long-term growth trajectory for premium spirits remains strong.
As this Seeking Alpha contributor recently noted, the total addressable market for spirits could grow by $550 million this decade. Continued growth in developing economies is a trend that’s a friend to this company’s premium liquor business.
With shares trading more than 20% below their 52-week high, DEO stock could be a solid rebound play as the globe gets over the coronavirus.
MGM Resorts (MGM)
Source: Jason Patrick Ross / Shutterstock.com
Coronavirus lockdowns means casinos are sitting idle. However, that doesn’t mean its time to avoid gaming stocks. Many are skeptical casino foot traffic can return to prior levels immediately after the pandemic. Yet, with millions of die-hard gamblers getting the itch to hit the tables, we could see a quicker rebound than in other hard-hit industries.
This factor makes MGM stock a strong buy as “shelter-in-place” winds down. Investors have already heeded the call, with major gaming stocks rallying in recent weeks. But don’t take that to mean the party’s over in terms of upside.
Uncertainty continues with casino stocks. It’s still unknown how quickly casinos on the Las Vegas strip will reopen. Also, who’s to say whether plans to ensure safety won’t result in reducing gaming volume?
3 Tech Stocks Backed By Killer New Laptop Releases
That being said, MGM stock could be another great sin stocks name to buy on a downturn. Getting in while the industry struggles, shares could skyrocket to prior levels once things return to the high-water mark.
Molson Coors (TAP)
Source: OleksandrShnuryk / Shutterstock.com
With stadiums and bars closed, the beer industry isn’t exactly in a strong place right now. But, again, that could mean a great time to buy beer names. In a recent article, I discussed how Anheuser-Busch (NYSE:BUD) may be a great bottom-fisher’s buy at today’s prices. However, TAP stock could be another solid choice.
The makers of Coors, Mille and other popular beer brands, Molson Coors is facing some earnings hiccups from the pandemic. Closed public venues means a significant revenue hit, even as pandemic stockpiling helped temporarily boost at-home consumption sales.
Yet, like with BUD stock, today’s tough times for brewers may mean a solid entry point for TAP stock. Shares trade at an extremely low forward price-to-earnings (P/E) ratio of 11.3. With a strong 6.3% dividend yield, get paid while you wait for shares to rebound.
All in all, it may be Miller time for your portfolio when it comes to TAP stock. Consider it a buy as shares trade more than 40% below their 52-week high.
Thomas Niel, contributor to InvestorPlace, has written single-stock analysis since 2016. As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities.
The post 5 Sin Stocks to Buy to Profit From Pent-Up Desires appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Here are five names to consider: Altria Group (NYSE:MO) Constellation Brands (NYSE:STZ) Diageo (NYSE:DEO) MGM Resorts (NYSE:MGM) Molson Coors (NYSE:TAP) These five names offers both healthy dividend yields, along with beaten-down share prices due to the pandemic. Diageo (DEO) DEO)" width="300" height="169"> Source: Shutterstock A global beer and spirits purveyor, think of DEO stock as a fully-stocked bar. Also, DEO stock sports a decent 2% dividend.
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Here are five names to consider: Altria Group (NYSE:MO) Constellation Brands (NYSE:STZ) Diageo (NYSE:DEO) MGM Resorts (NYSE:MGM) Molson Coors (NYSE:TAP) These five names offers both healthy dividend yields, along with beaten-down share prices due to the pandemic. Diageo (DEO) DEO)" width="300" height="169"> Source: Shutterstock A global beer and spirits purveyor, think of DEO stock as a fully-stocked bar. Also, DEO stock sports a decent 2% dividend.
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Here are five names to consider: Altria Group (NYSE:MO) Constellation Brands (NYSE:STZ) Diageo (NYSE:DEO) MGM Resorts (NYSE:MGM) Molson Coors (NYSE:TAP) These five names offers both healthy dividend yields, along with beaten-down share prices due to the pandemic. Diageo (DEO) DEO)" width="300" height="169"> Source: Shutterstock A global beer and spirits purveyor, think of DEO stock as a fully-stocked bar. Also, DEO stock sports a decent 2% dividend.
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Here are five names to consider: Altria Group (NYSE:MO) Constellation Brands (NYSE:STZ) Diageo (NYSE:DEO) MGM Resorts (NYSE:MGM) Molson Coors (NYSE:TAP) These five names offers both healthy dividend yields, along with beaten-down share prices due to the pandemic. Diageo (DEO) DEO)" width="300" height="169"> Source: Shutterstock A global beer and spirits purveyor, think of DEO stock as a fully-stocked bar. Also, DEO stock sports a decent 2% dividend.
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3a6f673b-21ab-4ab1-ab04-5dd3160523e5
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727718.0
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2020-05-08 00:00:00 UTC
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10 Buy-and-Hold Stocks to Own Forever
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DEO
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https://www.nasdaq.com/articles/10-buy-and-hold-stocks-to-own-forever-2020-05-08
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
[Editor’s note: “10 Buy-and-Hold Stocks to Own Forever” was previously published in February 2020. It has since been updated to include the most relevant information available.]
Investing to “buy and hold” is trickier than it looks. The increasing pace of technological change means even the most successful, dominant companies have to continually adapt to keep up. Industries like energy, real estate and even consumer products are facing potentially significant long-term changes going forward.
In any era, amassing a collection of retirement stocks simply by buying the best companies and holding them for years can be a risky endeavor.
General Motors (NYSE:GM) was a classic “widows and orphans” stock until the last decade when GM wound up going bankrupt. United States Steel (NYSE:X) once was a pillar of corporate America and a buy-and-hold stock. Polaroid and Eastman Kodak were once blue-chip stocks. Both went bankrupt as cameras changed from film to digital.
7 A-Rated REITs to Buy Now
But there still are stocks to buy and hold out there that can last forever, while offering dividend income along the way.
Here are ten such retirement stocks to buy and hold forever.
Bank of America (BAC)
Source: Tero Vesalainen / Shutterstock.com
Dividend Yield: 3.15%
It might seem strange to open the list with Bank of America (NYSE:BAC). After all, we’re only a bit more than a decade on from the financial crisis.
During that crisis, BofA acquisition Countrywide Financial blew up in spectacular fashion, after pioneering many of the risky tactics that led to the bubble and subsequent bust.
But this is a different BofA.
Net consumer charge-offs hit a decade-long low last year. Its performance on credit metrics is strong. Government regulations have been criticized as slowing growth — but they’ve undoubtedly lowered risk as well, even if observers might argue that a better balance is needed.
No less than Warren Buffett is now BofA’s largest shareholder, through his Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.B). And the Oracle of Omaha is fond of saying that his favorite holding period is “forever.”
That seems likely true for BAC stock as well.
Diageo (DEO)
Dividend Yield: 2.52%
Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well.
The brands owned by Diageo (NYSE:DEO) are well-positioned to adapt to shifting tastes.
Diageo owns classic brands like Johnnie Walker whisky, Tanqueray gin, Smirnoff vodka, and Harp and Guinness beer, among many others. What most have in common is a timeless quality and worldwide brand recognition.
As a result, while beverage giants like Coca-Cola (NYSE:KO) and Anheuser Busch InBev (NYSE:BUD) have struggled with profit growth, Diageo grew operating profits by 5.8% in fiscal 2019 and expects consistent growth going forward.
9 Online Retail Stocks Profiting From Social Distancing
Yet with a trailing multiple of 24.3, and with a dividend yield of more than 2%, Diageo stock isn’t all that dearly valued. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
Medtronic (MDT)
Source: JHVEPhoto / Shutterstock.com
Dividend Yield: 2.18%
In this day and age, the U.S. healthcare market, in particular, seems potentially volatile.
Concerns about increased spending and political battles over the Affordable Care Act create more questions than answers.
But even with that uncertainty, Medtronic (NYSE:MDT) isn’t going anywhere. The company’s devices are an integral part of modern medicine, ranging from pacemakers to stents to bone grafts to imaging systems.
Even the risks involved in the sector look priced into MDT. Medtronic’s days of double-digit annual growth may well be behind it, but it’s not finished increasing earnings or dividends. MDT stock likely isn’t finished rising, either.
NextEra Energy (NEE)
Source: Shutterstock
Dividend Yield: 2.49%
Utility stocks are among the most common safe, buy-and-hold stocks. NextEra Energy (NYSE:NEE) is now the largest electric utility in the U.S. by market capitalization. That might actually be the only problem with NEE stock.
After cratering in March, NextEra shares have rebounded quite well, given how tough it has been for other energy companies. Potential valuation concerns aside, NextEra looks like a winner. It serves customers in the southern Florida region, still one of the nation’s fastest-growing areas.
A 35 P/E multiple is high for the space but not outlandishly so. And a more than 2% dividend yield provides income along the way.
10 Overleveraged Stocks to Sell For Peace of Mind
Investors looking for value in the space might look for a smaller play like cheaper Dominion Energy (NYSE:D). But it’s usually worth paying for quality, and NextEra Energy looks like one of the best utility stocks out there.
McCormick & Company (MKC)
Source: Shutterstock
Dividend Yield: 1.54%
McCormick & Company (NYSE:MKC) is another quality company whose valuation might spook some investors. But MKC stock very rarely is offered cheaply.
The company’s market leadership in spices and seasonings provides both an impressive moat and protection against economic downturns. MKC stock did dip after the company acquired French’s mustard and Frank’s RedHot sauce from Reckitt Benckiser (OTCMKTS:RBGLY) at a price that looked a bit high to many investors. But MKC has recovered those gains and then some.
Top-line growth for McCormick likely isn’t going to be explosive, but it will be steady. The same has been true of MKC stock, which has returned an average of 13% a year over the past decade, including dividends.
With continuous cost-cutting initiatives, the contribution from the acquired brands and organic growth (and growth in organic products), MKC still should be able to provide double-digit annual returns going forward as well.
Allstate (ALL)
Source: Shutterstock
Dividend Yield: 2.14%
Allstate Corp (NYSE:ALL) long has used the tagline, “You’re in good hands,” and it’s true for Allstate investors as well.
ALL stock has almost quadrupled from late-2011 lows. And there could be more upside to come. After all, Allstate isn’t particularly expensive, trading at a 14 P/E.
Once any short-term worries subside, ALL should resume its march upward.
International Flavors & Fragrances (IFF)
Source: Shutterstock
Dividend Yield: 2.3%
International Flavors & Fragrances (NYSE:IFF) is a company most consumers encounter every day without knowing it and many investors aren’t exactly hip to it, either.
As its name suggests, the company develops flavors & fragrances across 13 categories, including cosmetics, perfumes, beverages and sweet flavors. Sales and earnings have increased consistently and so has IFF’s share price. At a 20.75 P/E, IFF does look a bit pricey. But, as with McCormick and other stocks on this list, investors should pay for quality.
IFF’s hidden, but key role, in so many industries, gives it a great deal of protection against both competition and macro factors. Acquisitions and a growing cosmetic additive business both provide room for growth.
Consumers may not know IFF, but investors should.
Lamb Weston (LW)
Source: Shutterstock
Dividend Yield: 1.66%
Lamb Weston (NYSE:LW) was spun off from Conagra Brands (NYSE:CAG) last year. Lamb Weston is the No. 1 potato producer in the United States. In fact, it manufactures the well-known fries at McDonald’s (NYSE:MCD), among other restaurant chains.
Lamb Weston also has a consumer business (including a small segment that manufactures frozen vegetables), while serving restaurants of all sizes. Health concerns might seem a long-term headwind against the business, but growth has been steady for years, and margins continue to improve.
LW is targeting international markets for growth, as French fries have much more limited penetration, while international audiences generally are intrigued by Americanized products.
9 Healthcare Stocks to Buy Even After the Coronavirus Fades
Despite growth and leading market share, LW stock looks a lot cheaper than it has in awhile, trading at about 17 times next year’s earnings. The company did pick up a fair amount of debt in the CAG spinoff. But it’s paying that debt down, which should lower interest expense and boost cash flow going forward.
With many similar stocks trading at much higher multiples, LW seems to have room for upside. And international growth should offset any health-related concerns in the U.S., should they arise. America’s love affair with French fries isn’t going to suddenly end, and that should ensure years of stability for Lamb Weston at least.
Fortune Brands (FBHS)
Source: Shutterstock
Dividend Yield: 1.78%
Investors are commonly advised to diversify their portfolio. Fortune Brands Home & Security (NYSE:FBHS) has done just that.
The company operates in four segments: Cabinets, Plumbing, Doors, and Security. Among its well-known brands are Moen in plumbing, and MasterLock in security.
FBHS is more of a cyclical stock than most on this list, and the company no doubt has benefited from the steady if slow, housing recovery in the U.S.
But the company’s products also generate relatively stable replacement demand, and the dividend provides modest, but growing, income.
Fortune Brands has been an impressive company since its founding and a solid stock since its 2011 IPO. There may be a bit more volatility here, but that’s a worthwhile price to pay for long-term investors. There’s enough value in Fortune Brands to ride out any market jitters.
Republic Services (RSG)
Source: Shutterstock
Dividend Yield: 1.99%
Republic Services (NYSE:RSG) is a bit smaller and likely a lot less well-known than rival Waste Management (NYSE:WM). But in this case, that’s not necessarily a bad thing.
Republic Services has outgrown its larger competitor in both sales and earnings over the past five years. RSG stock has modestly outperformed WM over the same period as well. Investors appear to believe that will continue, as Republic Services is valued a bit higher than Waste Management, at least based on forward-earnings multiples.
Both RSG and WM are solid long-term plays. Contracted revenue and steady demand should support both companies for years to come. There’s room for further acquisitions in a relatively fragmented space. Republic Services gets the nod here due to slightly better growth and more room for margin improvement.
But investors looking for safe, stable growth can’t go wrong with either RSG or WM.
As of this writing, Vince Martin was long MKC.
The post 10 Buy-and-Hold Stocks to Own Forever appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (DEO) Dividend Yield: 2.52% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by Diageo (NYSE:DEO) are well-positioned to adapt to shifting tastes. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
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Diageo (DEO) Dividend Yield: 2.52% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by Diageo (NYSE:DEO) are well-positioned to adapt to shifting tastes. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
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Diageo (DEO) Dividend Yield: 2.52% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by Diageo (NYSE:DEO) are well-positioned to adapt to shifting tastes. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
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Diageo (DEO) Dividend Yield: 2.52% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by Diageo (NYSE:DEO) are well-positioned to adapt to shifting tastes. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
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3a07ef47-9b10-4cf1-af93-d275c41dfd12
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727719.0
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2020-05-05 00:00:00 UTC
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Don't Underestimate Diageo's Resiliency
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DEO
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https://www.nasdaq.com/articles/dont-underestimate-diageos-resiliency-2020-05-05
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nan
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nan
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Like most consumer-facing companies, spirits producer Diageo (NYSE: DEO) has struggled with the effects of coronavirus-related shutdowns. It's not that consumers don't want its products. It's that they're having a relatively tough time getting them. Most restaurants remain closed, crimping on-premise sales that account for about half of the liquor's total business. The alcohol industry isn't coming out of the COVID-19 contagion unscathed.
It may be faring far better than many people have presumed, however. While consumers clearly aren't buying their booze from bars and restaurants right now, they're buying a whole lot more alcohol from supermarkets and liquor stores than they normally would. Spirits sales continue to lead that charge, building on a trend that was set in motion before the coronavirus outbreak. That's good news for Diageo.
Booze keeps on chuggin', led by spirits
The Spirits Business, an industry news site, reported recently that through the week ending April 18, off-trade sales (that is, sales made in supermarkets rather than restaurants) were up 15%, according to data from Nielsen. The big increase extends a streak of big year-over-year growth that started to take shape in March, as millions and millions of consumers were increasingly told to stay home to curb the spread of COVID-19.
Image source: Getty Images.
It wasn't a purely American phenomenon either. Nielsen reportedly found that in March, stores' alcohol sales in the UK grew more than 10% even as retail sales slumped 5%.
There was a noteworthy nuance buried within Nielsen's data, however, that The Spirits Business highlighted. Whereas beer and wine sales were up 12% and 14%, respectively, for the week in question, sales of spirits -- vodka, bourbon, gin, and the like -- grew more than 27%.
Online purchases (where permissible) are driving a lot of that growth. Nielsen further reports that between the beginning of March and the middle of April, e-commerce sales of alcohol were up to the tune of 234%. That report didn't indicate exactly what sort of alcohol was leading or lagging that growth, but previous Nielsen numbers have suggested that spirits are responsible for most of that progress as well.
Consumers want their drinks.
Diageo is the best of the best
It's an undertow that bodes well for the often overlooked and surprisingly resilient spirits segment of the alcohol industry.
An already difficult beer market has been disrupted by the introduction of hard seltzers, which may also be poaching wine drinkers. For the first time in 25 years, wine sales in the U.S. fell in 2019. Largely lost in the discussion is the fact that spirits sales remain relatively unfazed, growing for a 10th straight year in 2019. Within that sliver of the market, Diageo remains an undisputed leader, now for a couple more reasons.
One of them is the fact that Diageo was the winner of nearly 80 awards at this year's San Francisco World Spirits Competition. Awards don't pay bills, and at this particular moment, Diageo would likely rather have liquidity than accolades. It just borrowed $2.5 billion to help navigate the uncertain waters created by the global pandemic.
Still, it's difficult to deny its spirits product lines are some of the best (if not the best) in the world. That counts for something sooner or later.
The other fresh reason? Separately, The Spirits Business reported this week that among the spirits influencers Twitter research outfit GlobalData keeps tabs on, Diageo was their most mentioned brand during the first quarter.
It's another anecdotal piece of information to take with a grain of salt. Just like awards, Twitter mentions don't necessarily produce sales or profits. Influencers are also sometimes paid, and with the World Spirits Competition coming up, it's possible those influencers had good reason to discuss the company.
On the other hand, consumers respond to what they see and hear through social media. If the word Diageo -- or its brands like Ketel One or Pampero -- are making the rounds on the internet, it certainly helps the sales and branding effort.
An ideal mix
Don't misread the message. Diageo is seeing good off-trade growth, but that's not its entire business. The coronavirus is taking its toll, to be sure. As GlobalData analyst Carmen Bryan put it earlier this month: "Supply and manufacturing disruptions will likely continue throughout the year, as Diageo and others in the same boat attempt to get back on their feet. The question now is, what does this mean for 2021 and beyond? What is certain, is that recovery will take time."
It's a headwind that may already be priced into shares of the stock though -- and then some -- and erroneously so.
This company's biggest market is North America, where it drives 35% of its total business. But, of that 35%, only 20% of North America's spirits sales is on-trade revenue. The other 80% is off-trade business, which is the piece of the market that's actually seeing growth in the midst of shutdowns. Diageo's next biggest market is Europe and Turkey (mostly Europe), where its on-trade/off-trade split is roughly 50/50 to make up 23% of its top line. But, even so, Nielsen's data indicates that at least some of the effect of coronavirus shutdowns is being offset by increased off-trade buying.
Investors may simply be overlooking these details. As of Monday's close, the S&P 500 was only down 16% from its February high, while Diageo shares were down almost 20% from their January peak. The exaggerated sell-off in February and March, not followed up by a huge recovery effort, suggests the market believes Diageo is far more vulnerable than it actually may be. That's where the opportunity lies.
To that end, analysts are still modeling growth coming out of 2020 and into 2021.
Data source: Thomson Reuters/Refinitiv. Chart by author.
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James Brumley has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Twitter. The Motley Fool recommends Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Like most consumer-facing companies, spirits producer Diageo (NYSE: DEO) has struggled with the effects of coronavirus-related shutdowns. That report didn't indicate exactly what sort of alcohol was leading or lagging that growth, but previous Nielsen numbers have suggested that spirits are responsible for most of that progress as well. As GlobalData analyst Carmen Bryan put it earlier this month: "Supply and manufacturing disruptions will likely continue throughout the year, as Diageo and others in the same boat attempt to get back on their feet.
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Like most consumer-facing companies, spirits producer Diageo (NYSE: DEO) has struggled with the effects of coronavirus-related shutdowns. Separately, The Spirits Business reported this week that among the spirits influencers Twitter research outfit GlobalData keeps tabs on, Diageo was their most mentioned brand during the first quarter. Just like awards, Twitter mentions don't necessarily produce sales or profits.
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Like most consumer-facing companies, spirits producer Diageo (NYSE: DEO) has struggled with the effects of coronavirus-related shutdowns. Booze keeps on chuggin', led by spirits The Spirits Business, an industry news site, reported recently that through the week ending April 18, off-trade sales (that is, sales made in supermarkets rather than restaurants) were up 15%, according to data from Nielsen. Whereas beer and wine sales were up 12% and 14%, respectively, for the week in question, sales of spirits -- vodka, bourbon, gin, and the like -- grew more than 27%.
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Like most consumer-facing companies, spirits producer Diageo (NYSE: DEO) has struggled with the effects of coronavirus-related shutdowns. It's not that consumers don't want its products. Booze keeps on chuggin', led by spirits The Spirits Business, an industry news site, reported recently that through the week ending April 18, off-trade sales (that is, sales made in supermarkets rather than restaurants) were up 15%, according to data from Nielsen.
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b9e7ad0b-cd82-4769-a3b3-030fbdff55ac
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727720.0
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2020-04-21 00:00:00 UTC
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First Week of DEO June 19th Options Trading
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DEO
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https://www.nasdaq.com/articles/first-week-of-deo-june-19th-options-trading-2020-04-21
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nan
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nan
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Investors in Diageo plc (Symbol: DEO) saw new options become available this week, for the June 19th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the DEO options chain for the new June 19th contracts and identified one put and one call contract of particular interest.
The put contract at the $105.00 strike price has a current bid of 90 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $105.00, but will also collect the premium, putting the cost basis of the shares at $104.10 (before broker commissions). To an investor already interested in purchasing shares of DEO, that could represent an attractive alternative to paying $130.56/share today.
Because the $105.00 strike represents an approximate 20% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 96%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 0.86% return on the cash commitment, or 5.30% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Diageo plc, and highlighting in green where the $105.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $135.00 strike price has a current bid of $3.60. If an investor was to purchase shares of DEO stock at the current price level of $130.56/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $135.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 6.16% if the stock gets called away at the June 19th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if DEO shares really soar, which is why looking at the trailing twelve month trading history for Diageo plc, as well as studying the business fundamentals becomes important. Below is a chart showing DEO's trailing twelve month trading history, with the $135.00 strike highlighted in red:
Considering the fact that the $135.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 59%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.76% boost of extra return to the investor, or 17.06% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example is 50%, while the implied volatility in the call contract example is 46%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $130.56) to be 32%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Of course, a lot of upside could potentially be left on the table if DEO shares really soar, which is why looking at the trailing twelve month trading history for Diageo plc, as well as studying the business fundamentals becomes important. Below is a chart showing DEO's trailing twelve month trading history, with the $135.00 strike highlighted in red: Considering the fact that the $135.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Diageo plc (Symbol: DEO) saw new options become available this week, for the June 19th expiration.
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Below is a chart showing DEO's trailing twelve month trading history, with the $135.00 strike highlighted in red: Considering the fact that the $135.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Diageo plc (Symbol: DEO) saw new options become available this week, for the June 19th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the DEO options chain for the new June 19th contracts and identified one put and one call contract of particular interest.
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Below is a chart showing DEO's trailing twelve month trading history, with the $135.00 strike highlighted in red: Considering the fact that the $135.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Diageo plc (Symbol: DEO) saw new options become available this week, for the June 19th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the DEO options chain for the new June 19th contracts and identified one put and one call contract of particular interest.
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At Stock Options Channel, our YieldBoost formula has looked up and down the DEO options chain for the new June 19th contracts and identified one put and one call contract of particular interest. Below is a chart showing DEO's trailing twelve month trading history, with the $135.00 strike highlighted in red: Considering the fact that the $135.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Diageo plc (Symbol: DEO) saw new options become available this week, for the June 19th expiration.
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f651ce25-6009-4268-9711-0ceaff8461a9
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727721.0
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2020-04-16 00:00:00 UTC
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Spirits' Strength Should Lift Brown-Forman and Diageo
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DEO
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https://www.nasdaq.com/articles/spirits-strength-should-lift-brown-forman-and-diageo-2020-04-16
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nan
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nan
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Fans and followers of the adult beverage industry are undoubtedly aware of the impact hard seltzers have made. For the first time in 25 years, 2019's wine sales in the United States fell, while data from the Beverage Information Group says beer extended what's become a six-year downtrend.
The driving force of that deterioration has been widely chalked up to the rapid growth of the aforementioned hard seltzers. Led by brands like market-leading White Claw and Truly, owned by Boston Beer (NYSE: SAM), Nielsen estimates sales of the carbonated, low-carb alternative drink roughly tripled last year. Financial analysts from Jefferies and UBS are both looking for more double-digit growth in hard seltzer sales for the foreseeable future.
What's largely been omitted from the discussions to date, however, is that sales of spirits like bourbon, whiskey, and rum continue to chug ahead, unfazed by the disruption that's affected most other corners of the booze market.
Spirits lifted
The Distilled Spirits Council of the United States, or DISCUS, crunched the numbers. It reported in February that revenue generated by its distillers grew 5.3% last year, driven by a 3.3% increase in total volumes sold. DISCUS added that spirits took at least some of the market share from wine and beer that had been attributed to hard seltzers.
Image source: Getty Images.
It wasn't much, to be fair. Its total share of the alcohol industry's net U.S. revenue improved roughly 50 basis points to 37.8%.
Still, given the circumstances -- a relatively bitter tariff war that's crimped exports -- a 10th consecutive year of market share growth isn't too bad at all.
It's an obscured undertow that could seemingly be a tough one for investors to plug into. The liquor market is flooded with brands, and it's difficult to even simply know which labels are part of a publicly traded entity and which are privately held. But, as it turns out, a wide swath of these names is owned by a fairly small handful of companies that don't mind a little intra-company competition. Chief among them are Brown-Forman (NYSE: BF.A)(NYSE: BF.B) and Diageo (NYSE: DEO).
Brown-Forman and Diageo built to last
Diageo may be the name behind Guinness, but the bulk of its business is driven by booze brands like Tanqueray gin, Johnnie Walker scotch, and Smirnoff vodka, just to name a few. And, while Europe and North America are its breadwinners, the company's got respectable exposure to the Asia/Pacific region and Africa. Even Latin America and the Caribbean region account for about 10% of its top line. In the same vein, its production facilities are geographically diversified, sidestepping some of the tariff headaches that have plagued other companies.
Brown-Forman, on the other hand, is about as American as they come. It's also not quite as much of a pure play on spirits as Diageo is. While it's the parent to labels like Jack Daniels and Woodford Reserve whiskey and Finlandia Vodka, it's the owner of wine names Korbel and Sonoma-Cutrer as well. It's also most definitely been adversely affected by tariffs imposed on its exports to several other countries.
Still, whatever headwind tariffs have been creating, Brown-Forman is plowing through them. Through the first nine months of the current fiscal year that will end this month, sales were up 3%. Premium bourbon sales provided most of that growth. Conversely, it was weakness in non-branded and bulk sales of spirits that's kept growth fairly tempered this year (another idea DISCUS mentioned). That is, the demand for premium brands continues to swell. Brown-Forman has plenty of them.
Mostly unfazed by the coronavirus
The obvious 800-pound gorilla in the room is the global outbreak of the coronavirus, which has shuttered most bars and restaurants as the world tries to quell the epidemic. It's a highly encouraged (and often mandated) move that would seemingly turn the spirits spigots off.
Except, it really hasn't. While both Brown-Forman and Diageo would clearly rather see all sales venues fully utilized, consumers have proven resilient, opting for at-home options when they can't order a drink away from home. Nielsen reported that during the third week of March -- when the COVID-19 panic was most frenzied in the United States -- overall sales of hard liquor were up 55%. Online sales of alcohol were up a stunning 243% for the timeframe, and while wine sales dominate the online alcohol market, it was spirits sales that saw the most relative growth that week, with a 75% improvement.
That growth pace isn't expected to persist, but it's still anecdotal evidence of alcohol's marketability in an otherwise uncertain environment. The data also underscores the fact that spirits are the only sliver of the alcohol market not struggling just to hold onto market share.
10 stocks we like better than Brown-Forman (B Shares)
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*Stock Advisor returns as of March 18, 2020
James Brumley has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Boston Beer and Jefferies Financial Group Inc. The Motley Fool recommends Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Chief among them are Brown-Forman (NYSE: BF.A)(NYSE: BF.B) and Diageo (NYSE: DEO). Led by brands like market-leading White Claw and Truly, owned by Boston Beer (NYSE: SAM), Nielsen estimates sales of the carbonated, low-carb alternative drink roughly tripled last year. What's largely been omitted from the discussions to date, however, is that sales of spirits like bourbon, whiskey, and rum continue to chug ahead, unfazed by the disruption that's affected most other corners of the booze market.
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Chief among them are Brown-Forman (NYSE: BF.A)(NYSE: BF.B) and Diageo (NYSE: DEO). For the first time in 25 years, 2019's wine sales in the United States fell, while data from the Beverage Information Group says beer extended what's become a six-year downtrend. Its total share of the alcohol industry's net U.S. revenue improved roughly 50 basis points to 37.8%.
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Chief among them are Brown-Forman (NYSE: BF.A)(NYSE: BF.B) and Diageo (NYSE: DEO). Still, given the circumstances -- a relatively bitter tariff war that's crimped exports -- a 10th consecutive year of market share growth isn't too bad at all. Online sales of alcohol were up a stunning 243% for the timeframe, and while wine sales dominate the online alcohol market, it was spirits sales that saw the most relative growth that week, with a 75% improvement.
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Chief among them are Brown-Forman (NYSE: BF.A)(NYSE: BF.B) and Diageo (NYSE: DEO). DISCUS added that spirits took at least some of the market share from wine and beer that had been attributed to hard seltzers. Except, it really hasn't.
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cce32507-1e5a-43fa-90ab-5ea1032c13e3
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727722.0
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2020-04-13 00:00:00 UTC
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How Stay-at-Home Orders Are Impacting Businesses
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DEO
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https://www.nasdaq.com/articles/how-stay-at-home-orders-are-impacting-businesses-2020-04-13
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nan
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In this episode of Market Foolery, Chris Hill and Motley Fool analyst Bill Barker go through some business headlines. On the entertainment front, a streaming service provider hits a new milestone. There are updates from the beverage sector. A retail giant's sales were up, but the markets were not impressed. And they chat about how companies are protecting dividends, misconceptions about share buybacks, and much more.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
Editor's note: Chris Hill misspoke about NordicTrack in this podcast. ICON Health & Fitness owns NordicTrack. Nautilus brands include Bowflex, Nautilus, Schwinn, Universal, and Octane Fitness.
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This video was recorded on April 9, 2020.
Chris Hill: It's Thursday, April 9th. Welcome to MarketFoolery. I'm Chris Hill, joining me today, the one and only, Bill Barker. Thanks for being here.
Bill Barker: Thanks for having me.
Hill: We got a bunch of news. We've got some beverage news; we've got some retail news. We're going to start in the world of entertainment. Walt Disney (NYSE: DIS) came out and said that the number of people subscribing to the Disney+ streaming service has passed the 50 million mark, that is, global. And we've been talking for a while now about who benefits from everyone having to stay indoors; and video streaming is obviously a beneficiary.
The fact that they are able to roll this out into, for example, a place like India, where 8 million people have signed up, obviously, helps. But this is absolutely helping the business, because the cruise line, the parks are closed for the obvious reasons.
Barker: Yes. Disney, it's a broadly diversified company, maybe feeling at the moment, not quite broadly enough, because it's suffering more from this than a lot. It does have a number of things that you can stay home and watch, though. And thank goodness, they got Disney+ out there, because not only is it the parks, but really, for a long time, of course, the story of Disney was an ESPN story. And ESPN's numbers are predictably way down. And Disney+ is doing some lifting to even things out but it's a lot of different networks in the Disney property list that are off.
Hill: They're off, although, you had sent me the, I think, it was the Deutsche Bank, had put together a chart of sort of, directionally, where are the numbers going for the television networks. And as you said ESPN, ESPN2, both down big. You know, but things like, the A&E Network are up pretty substantially, National Geographic, Lifetime, you know. Again, it's great from a revenue standpoint that the Disney+ service is on the rise, but it probably helps them at least a little bit to see that some of their television networks are helping to offset the predictable drop in ESPN viewing.
Barker: Yeah, it's really, A&E and why -- I looked at that, I didn't research what is out on A&E right now that is causing this spike, because I think that's up 30% year-over-year. And I have not tuned into A&E in quite a while, I suppose, so I'm not sure what's driving that. I do understand, you know, ESPN off 50% and that to me seems pretty, pretty good, I guess I always thought ESPN's viewership would be off even more than that, but they are putting a lot of old games out there. And, you know, if you didn't catch them on ESPN Classic over the last 20 years then you can catch them on ESPN or ESPN2, I guess.
Hill: Let's move on to Starbucks (NASDAQ: SBUX). Starbucks updated their guidance for the second quarter, said their profits are going to be down 47% compared to a year ago. They withdrew guidance for the full fiscal year, which I think is something we're going to see over-and-over-and-over again, as companies either update guidance or provide their latest earnings report this month and into May, they stop their share buyback program, they are protecting that dividend, though.
Barker: Yeah, they were out on a little bit of a limb with the share buyback, I think, having reiterated that they were buying back shares over the last couple of weeks at some point. And everybody else has sort of hidden from that, I think, that that's creating headlines that are not wanted at the moment. So, yeah, they're going to cut back on probably their growth in stores, you know, from what their initial projections would have been, delay some of that, that'll save some cash. And not buy back shares right now, but I would expect them to, as they say, they're suspending the program, they're not getting rid of it, there'll be buybacks in the future by Starbucks.
But, you know, it's pretty flat today. I don't think 47% off is any huge surprise, it's putting a number on what intuitively one would have guessed would be a rather severe shock to the business.
Hill: Yeah, it's like you were saying about ESPN's drop in viewership, you know, I think we're now in this environment where numbers are going to be presented to us as investors, and it's entirely possible that our reaction is just going to be to shrug our shoulders and say, "Oh, I actually thought that would be worse." It's like, you know, ESPN viewership is down 50%, like, "Really? It's not that 80% or 90%, OK, 50% doesn't sound that bad." As a Starbucks shareholder, that was my reaction when I saw this number. It's like, "Really? Profits are only going to be down 47%, I really would have thought it would have been worse than that."
Barker: I guess it depends on where you are geographically in terms of whether the Starbucks that you know have any drive-thru because that's still there, and you've got people, obviously, addicted to caffeine and coffee and many are addicted, even more specifically, to the drinks they get at Starbucks. So, where they can get them, they've got the time to go out and find them. It's just, if they don't have the drive-thru; and there aren't many around here that I know of, drive-thrus for Starbucks.
Hill: Certainly, not where I live. But let me go back to the dividend for a second, because it is interesting to me to watch how companies are essentially deciding which levers to pull. And so, what Starbucks is doing with suspending the buyback program, so they can protect the dividend, Diageo came out and did the same thing. Earlier this week ExxonMobil came out and said that they are cutting their CapEx spending by 30% and it's because they want to protect the dividend.
Barker: Yeah, cutting the dividend is; it's just considered a last resort. And I guess it's just the nature of expectations. And it's interesting the degree to which buybacks have gotten these bad headlines, because when you buy back shares you are using cash and literally giving it back to shareholders by buying their shares, leaving the remaining shareholders with a slightly greater percentage of the company. If you buy back 2% of your shares, that's giving everybody 2% more of the company. If you give them a 2% dividend, that also is giving continuing shareholders money, but dividends are thought of as these good positive things that companies do, and share buybacks are considered a greedy thing by, I think, short-sighted headline seekers trying to create a narrative that isn't 100% accurate.
But be that as it may, protecting a dividend is something that a company likes to point to. You know, you'll find companies that can point to 50, 80 years of dividends without interruption, and that's a point of pride. Companies do not point out share buybacks as a point of pride.
Hill: Let's move to retail. Costco (NASDAQ: COST) came out with their same-store sales numbers for March. They're up nearly 10%. So, shout-out to the hoarders for really driving the same-store sales at Costco. I didn't look at it as closely as I'm assuming you did. My assumption is that this is all front-loaded to the first-half of the month, that what we saw in the first two weeks at Costco is really driving this number.
Barker: Yes, so the same-store sales were up, the core sales were up 12.3%, and I think that precisely that was following up on very good numbers from the end of February as people began to stock up/hoard. And so, this was a surprisingly light number against expectations. Apparently, the Wall Street expectations were above 20% for same-store sales for March. So, coming in at 12.3% the headline of 9.6%, this was considered disappointing. But, again, it's really just a number that is telling you part of the story of what is happening now, just as Disney's and Starbucks' are, and you say, well, I don't know how I'm supposed to guess what the number for this was going to be. And this is one where Wall Street got aggressive, "Oh, maybe everybody is going to Costco." No.
You know, Tractor Supply had very similar numbers up 10% in March. Again, this is sort of the same mix of the consumables driving a lot of that, and the rest of the sales are down.
Hill: Are you, as someone who does this for a living, are you looking forward to earnings season more than usual or are you dreading it more than usual? Because it seems to me that with more and more companies coming out and withdrawing their guidance, they're basically removing a data point. They're saying, "Look, we're not going to tell you what to expect." And look, some companies are really good at that, some companies are more helpful than others when it comes to that. And now, it's essentially just going to be here are the numbers, do whatever you want with them, you know, everybody is going to be Berkshire Hathaway now, where they're just like, no, we're just giving you the report, we're not telling you anything, we're not doing a conference call. Is that freeing for you or is that like, "Uh, God! this is going to be more work than usual?"
Barker: Well, yeah, if you're trying to invest on quarterly numbers and companies beating quarterly numbers or missing quarterly numbers, then this is going to be a nightmare for you, since that's really not how we in asset management operate, we're long-term buy-and-hold, really looking at the quality of the business.
Definitely, I'm looking forward to it, because this is an opportunity to see management deal with the nonroutine and you're going to learn more about management or at least something new about management that you didn't necessarily get to see all the time. Because when something is nonroutine outside of this period of time, it's usually a bad thing, so it's interesting to see management respond to mistakes and take the blame when they should. This is not really a situation where management is generally going to be shouldering the blame for bad numbers, but it will be interesting to see the different ways in which companies react to this. So, I think I'm looking forward to it in that it's out of the routine and I think there's a lot to be learned from that.
Hill: Before we wrap up, can we briefly talk about the stock of the day which I didn't even realize was a public company. You pointed out the latest news from Nautilus (NYSE: NLS). I think Nautilus is a company that does NordicTrack, I know they do home workout equipment. I think they're the parent company of NordicTrack. That stock is up 45% today.
Now, this is a very small company. I think the market cap is still below $200 million, but were you also surprised to see that Nautilus is a public company? [laughs]
Barker: Yeah, a little bit. I'm not surprised that they're doing well, of course. They sell a number of Bowflex and Schwinn biking and they're selling weights. This is one of the things that there was a report out, I think you've seen it, from Stackline on March sales, e-commerce sales, and what's up and what's down. And weight training is up 300% March, this is 2020 over 2019.
Hill: Right, this is by category, this is not by retailer, this is by "Hey, just in terms of the categories of things that people can buy online, what's higher in March of this year as opposed to March of 2019?"
Barker: Yeah. And No. 1, disposable gloves, sure, up 670%. No. 2, bread machines. So, if there's any company out there that just makes bread machines. Bread machines online are up 652% according to this report. And, boy! the companies that just make luggage that was off 77%, that was the hardest hit: luggage, suitcases and briefcases. But, yeah, Nautilus is in the right place for the month of March. And it's a tiny company and enjoying a very good day for the stock today. So, they're doing all right.
Hill: Yeah, weight training up more than 300% year-over-year. That's pretty incredible.
Barker: Yeah, my son wanted some weights, we've got some, he wanted some heavier ones to act bigger and tougher than what we had on hand, so I ordered some and waited a couple weeks and that was canceled because, I guess, they were out, so. I didn't order from Nautilus, but I'm not surprised, having gone through the experience myself of seeing I was unable to get my hands on some weights right now.
How about you, what are you doing, what are you working out with right now?
Hill: I'm just occasionally going for a run. Like that's it.
Barker: Exactly. Are you on target for your, you know, Fall marathon training? It's a little early for that, I guess.
Hill: Yeah, the races I've signed up for have all been, you know, either pushed back to later in the year or pushed back to 2021. So, races are basically like the movie calendar now. It's like, "No, no, no," "Oh, you thought this was happening in the Spring. No, no, no, we're going to do this in the Fall or we're just going to push it off to next year."
Can I just highlight one, surprising to me anyway, category in this Stackline report? Wine racks down 40%. I don't know. I just think of alcohol as one of those categories that is probably going to do pretty well. But maybe it's doing so well that, like, "No, I don't need to put this in a rack, I'm going to go through this case of wine quickly."
Barker: Yeah, this thing is never even going to hit the rack. [laughs] What were we thinking leaving wine on racks for all that time? I got a better way to use the wine.
Hill: Alright. Thanks for being here; I appreciate it.
Barker: Alright.
Hill: As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.
That's going to do it for this edition of MarketFoolery. The show is mixed by Dan Boyd, I'm Chris Hill, thanks for listening, we'll see you next week.
Bill Barker owns shares of Walt Disney. Bill Barker is an employee of Motley Fool Asset Management, a separate, sister company of The Motley Fool, LLC. The views of Bill Barker and Motley Fool Asset Management are not the views of The Motley Fool, LLC and should not be taken as such. Chris Hill owns shares of ExxonMobil, Starbucks, and Walt Disney. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Starbucks, Tractor Supply, and Walt Disney. The Motley Fool recommends Costco Wholesale and Diageo and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2021 $60 calls on Walt Disney, short April 2020 $135 calls on Walt Disney, and short June 2020 $205 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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A full transcript follows the video. See the 10 stocks Stock Advisor returns as of 2/1/20 This video was recorded on April 9, 2020. And we've been talking for a while now about who benefits from everyone having to stay indoors; and video streaming is obviously a beneficiary.
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A full transcript follows the video. See the 10 stocks Stock Advisor returns as of 2/1/20 This video was recorded on April 9, 2020. And we've been talking for a while now about who benefits from everyone having to stay indoors; and video streaming is obviously a beneficiary.
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A full transcript follows the video. See the 10 stocks Stock Advisor returns as of 2/1/20 This video was recorded on April 9, 2020. And we've been talking for a while now about who benefits from everyone having to stay indoors; and video streaming is obviously a beneficiary.
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A full transcript follows the video. See the 10 stocks Stock Advisor returns as of 2/1/20 This video was recorded on April 9, 2020. And we've been talking for a while now about who benefits from everyone having to stay indoors; and video streaming is obviously a beneficiary.
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727723.0
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2020-04-10 00:00:00 UTC
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Is Diageo Stock a Buy?
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DEO
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https://www.nasdaq.com/articles/is-diageo-stock-a-buy-2020-04-10
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nan
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nan
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While the world medical community works toward containing COVID-19, investors are sifting through stocks, trying to identify the companies that present the opportunity of a lifetime while avoiding those that will struggle to recover from the bear market. Consumer-discretionary stocks in the food and beverage industry have been hit especially hard by the pandemic.
The share price of London-based alcoholic beverage giant Diageo (NYSE: DEO) recently approached five-year lows. Is this one of those golden buying opportunities?
Image source: Getty Images.
How will premium alcohol brands fare during the downturn?
Founded in 1997, Diageo is a global leader in the alcoholic beverage market with ownership of over 200 brands of beer and spirits. The company's products are sold in more than 180 countries.
Notable brands include Johnnie Walker, Crown Royal, J&B, Buchanan's, and Windsor whiskies; Smirnoff, Ciroc, and Ketel One vodkas; Captain Morgan rum, Baileys Irish Cream liqueur, Don Julio tequila, and Tanqueray gin. Beer, led by Guinness, is the company's second largest category after scotch.
This broad portfolio appeals to markets in both developed and emerging countries. Management's strategy is focused on accelerating growth of higher-margin premium brands by first participating in the mainstream spirits market, then introducing consumers to more expensive premium and reserve brands through aspirational marketing.
All of this was working great with consistent revenue growth, a rising share price, and 20 years of dividends -- until the coronavirus outbreak.
With bars, restaurants, and many liquor stores closed, the share price has dropped about 20% year to date, giving the stock a price-to-earnings valuation of 20.
Data by YCharts.
On April 9, the company provided investors with a business update related to COVID-19. The company said demand was slowly returning in China, but in most other areas of the world, a significant portion of demand has dried up due to widespread restaurant and bar closures. However, management noted that retail sales have seen a boost over the past several weeks, but management is uncertain whether the heightened demand in that channel will last. Given the uncertainty around so many major markets, the company withdrew its guidance for organic net sales growth and organic operating profit growth for fiscal 2020.
The world will eventually get through this difficult period, and people will again go out to bars and restaurants. Diageo, with its leading portfolio of brands, should slowly return to normal operating conditions. In the meantime, Diageo aims to keep its name in consumers' minds by donating alcohol to hand sanitizer producers worldwide to help address shortages. The contribution will help create more than eight million bottles of the disinfectant.
Is it time for investors to raise a glass?
As of this writing, Diageo stock offers an attractive dividend yield of 2.1%. The 2019 year-end report noted that the company targets a coverage ratio (earnings per share to dividends per share) of 1.8 to 2.2 times. Dividend coverage for 2019 was 1.9 times, and before the coronavirus, management was planning to make adjustments until that ratio was closer to the midpoint of its target range.
Diageo's underlying fundamentals include massive brand power and global revenue distributed over a wide range of markets. In calendar 2019, sales grew 4.9%, and adjusted earnings per share jumped 7.0%.
In the April 9 statement, CEO Ivan Menezes reassured investors that the April dividend would be paid, but management suspended its share repurchases through the rest of fiscal 2020.
All things considered, I think investors should wait to invest until management can provide a more detailed business outlook in light of the pandemic. Diageo's underlying business is solid, but I'd like more clarity on any strategic changes given uncertain market realities.
10 stocks we like better than Diageo
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Diageo wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of March 18, 2020
Anne Burdakin has no position in any of the stocks mentioned. The Motley Fool recommends Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The share price of London-based alcoholic beverage giant Diageo (NYSE: DEO) recently approached five-year lows. While the world medical community works toward containing COVID-19, investors are sifting through stocks, trying to identify the companies that present the opportunity of a lifetime while avoiding those that will struggle to recover from the bear market. Notable brands include Johnnie Walker, Crown Royal, J&B, Buchanan's, and Windsor whiskies; Smirnoff, Ciroc, and Ketel One vodkas; Captain Morgan rum, Baileys Irish Cream liqueur, Don Julio tequila, and Tanqueray gin.
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The share price of London-based alcoholic beverage giant Diageo (NYSE: DEO) recently approached five-year lows. Given the uncertainty around so many major markets, the company withdrew its guidance for organic net sales growth and organic operating profit growth for fiscal 2020. The 2019 year-end report noted that the company targets a coverage ratio (earnings per share to dividends per share) of 1.8 to 2.2 times.
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The share price of London-based alcoholic beverage giant Diageo (NYSE: DEO) recently approached five-year lows. While the world medical community works toward containing COVID-19, investors are sifting through stocks, trying to identify the companies that present the opportunity of a lifetime while avoiding those that will struggle to recover from the bear market. Management's strategy is focused on accelerating growth of higher-margin premium brands by first participating in the mainstream spirits market, then introducing consumers to more expensive premium and reserve brands through aspirational marketing.
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The share price of London-based alcoholic beverage giant Diageo (NYSE: DEO) recently approached five-year lows. Founded in 1997, Diageo is a global leader in the alcoholic beverage market with ownership of over 200 brands of beer and spirits. On April 9, the company provided investors with a business update related to COVID-19.
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727724.0
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2020-03-31 00:00:00 UTC
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7 Super Stable Dividend Stocks to Buy Now
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DEO
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https://www.nasdaq.com/articles/7-super-stable-dividend-stocks-to-buy-now-2020-03-31
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
[Editor’s note: “7 Super Stable Dividend Stocks to Buy Now” was previously published in February 2019. It has since been updated to include the most relevant information available.]
It’s been a long few weeks for the market as COVID-19 worries have taken the main stage.
Before things tanked, the stock market, as measured by the S&P 500, was up 15% just since October. Some sectors of the economy, like software-as-a-service stocks, were up much more than that. However, those days are over and many investors are looking for a safe harbor.
One way to deal with this uncertainty is to move into safer dividend stocks. This way, you still have exposure to the stock market as prices begin to recover. On the other hand, if the market takes another tumble, these defensive names should fall much less than the overall market. Regardless of whatever may come, they’ll kick out a steady income stream that helps buffer your portfolio from market volatility.
Walmart (WMT)
Source: Jonathan Weiss / Shutterstock.com
Dividend Yield: 1.88%
If you’re thinking of super safe dividend stocks, your mind may start out with the Dividend Aristocrats. These are in fact true royalty — the select few companies that have managed to increase their dividends annually for at least 25 years in a row. At present, there are around 55 American firms that qualify.
Of these, only two — yes, two — managed to generate a positive total return between October 2007, when the stock market peaked, and the March 2009 Financial Crisis bottom. Walmart (NYSE:WMT) was the winner of the bunch, with its stock actually going up 7% over that span. Needless to say, generating a positive return during a time when the stock market plunges 50% is a most remarkable feat.
Making it doubly-impressive, chief Walmart rival Target (NYSE:TGT) plummeted 61% over the same span. Walmart’s unique blend of lowest-cost supply chain and unrivaled focus on customer value delivered the goods during the economic downturn. Recently, investors have focused more on Walmart’s possibilities in the e-commerce space. But don’t forget that when it comes to delivering value, Walmart is still the proven king of retail during recessions.
Colgate (CL)
Source: Isabelle OHara/Shutterstock.com
Dividend Yield: 2.64%
Colgate (NYSE:CL) was another of the best-performing Dividend Aristocrats during the Financial Crisis.
It didn’t eke out a positive return over the stretch, but it only fell 20%. That’s exactly the sort of thing you want from super safe dividend stocks.
What makes Colgate so safe? To put it simply, the company has a ridiculously strong moat. It sells more than 40% of the world’s toothpaste and a third of its manual toothbrushes. Go to nearly every corner of the world, and you’ll find Colgate products. It’s one of the world’s most omnipresent American brands.
Combine that with a market that never changes — people need to clean their teeth regardless of what else happens in the world — and you have unmatched safety.
10 Stocks to Buy That Will Benefit From Coronavirus Mayhem
Colgate stock used to be quite expensive. But after five years of the share price going nowhere, Colgate is more reasonably-valued now. It pays an almost 2.3% dividend and could offer surprisingly high growth in the coming years as emerging markets pick up steam. It also has made a play in the more competitive though higher-growth pet food market, and success there could energize the stock. Even if that fails, however, the core toothpaste market will continue carrying the stock through any storms that may come.
Pepsico (PEP)
Source: FotograFFF / Shutterstock.com
Dividend Yield: 3.04%
Pepsico (NYSE:PEP) may not look like the cheapest dividend stock out there at first glance. Yes, it is selling for more than 25x earnings. And yes, it is also selling near its all-time high price. From a short-term trading perspective, this probably isn’t the best moment to get into Pepsico stock.
For longer-term investors, however, there’s still a lot to like. The company’s snack food division has given it more resilience and growth than its arch-rival beverages company.
Additionally, due to its heavy exposure to emerging markets, Pepsi has seen a major currency headwind in recent years. With the U.S. dollar near 20-year highs, this drag is likely to reverse at some point, leading to a significant earnings boost.
Then there’s the dividend yield. Pepsico has yielded between 2.5% and 3.2% for virtually all of the past decade. This means that while Pepsico’s stock price has appreciated dramatically, it is actually backed up by the rise in its earnings and dividends over the past 10 years. That’s definitely not the case for many other defensive slower-growing companies.
If you can get Pepsico on a pullback, all the better. But even at this price, it’s not a bad choice for investors seeking safe dividends.
Diageo (DEO)
Source: Shutterstock
Dividend Yield: 3.8%
Moving to harder beverages, we have international spirits leader Diageo (NYSE:DEO). Even, or maybe especially, during hard times, DEO is one of the most reliavle dividend stocks to buy.
The maker of Johnnie Walker, Crown Royal, Smirnoff, and Guinness, among other brands, has gone back on sale. Diageo’s stock price has slipped in recent weeks.
This makes some sense; Diageo has built an increasing portion of its business in recent years selling to wealthy customers in leading Asian markets. Sales in places such as Hong Kong have plummeted due to the virus.
As is always the case for the alcohol industry, however, setbacks tend to not last long. Liquor consumption is not closely linked to the economy or political developments, thus making these the safest sorts of dividend stocks.
7 Stocks to Buy Once the Market Bottoms
Diageo has a track record of raising its dividend every year so far this century (as measured in its home currency of British pounds) making it a reliable choice for steadily increasing income. While Diageo may suffer a bad quarter or two thanks to the virus-driven sales slowdown, this will be a non-event in due time for the company’s loyal shareholders.
Enbridge (ENB)
Source: Shutterstock
Dividend Yield: 8.66%
Some investors have given up on oil stocks given the carnage in recent years. And that’s an understandable reaction. Truth be told, there are still super safe dividend stocks in the sector, namely in the pipeline space.
For example, look at Enbridge (NYSE:ENB). Enbridge and other Canadian energy giants have faced a longer downturn in their market conditions already than their U.S. peers have. This has led to more capital discipline, thus these firms are more likely to turn a corner first.
This improved capital position is leading to another great thing for income investors: dividend increases. In fact, this year, Enbridge announced a 10% dividend hike. That is, by the way, its third year in a row of double-digit dividend hikes despite the hard times for the energy industry in general.
Take one of the best companies in the industry, and then combine it with an upturn in the long-beleaguered oil and gas markets, and Enbridge stock could deliver a strong upside in addition to its fat yield.
Unilever (UL)
Source: JHVEPhoto/Shutterstock.com
Dividend Yield: 4.48%
Unilever (NYSE:UL) is one of the world’s largest consumer products companies. Selling everything from energy drinks to ice cream, soap, cleaning supplies, and more, the company almost undoubtedly has some products in your pantry or laundry room.
Companies like Unilever are known for their rock-solid dividend records. In fact, 2020 should mark the company’s 4oth consecutive year of increasing its dividend; that’s a generous offer in today’s market.
Sure, some folks will complain that Unilever hasn’t shown a lot of growth in recent years. And that’s a fair criticism. At 25x earnings, Unilever stock doesn’t look particularly cheap, either. If you’re just here for one of the safest blue-chip dividends around, however, it’s hard to go wrong with Unilever.
7 Stocks Insiders Are Buying Big Amid the Market Panic
Compared to a Certificate of Deposit or government bond, Unilever’s 3% dividend with annual increases to that figure makes for a compelling alternative.
People’s United Financial (PBCT)
Source: Shutterstock
Dividend Yield: 6.17%
Remember how I said there were only two Dividend Aristocrats that made it through the Great Financial Crisis with a positive total return? The well-known one is Walmart, of course. But a plucky Connecticut bank, People’s United Financial (NASDAQ:PBCT), made it as well. PBCT stock managed a 2% positive return during that brutal span from late 2007 to the March 2009 low.
This is doubly amazing because People’s United is a bank, after all. Almost all the big banks were in desperate straits, if not outright bust at that point. But People’s United proved its mettle as a super stable dividend company during the crisis. Its banking market is the northeast, particularly in wealthy New York City and Boston suburbs. As a result, its well-off customers fared relatively well despite the crisis. And its lending book, largely vanilla home mortgages, was built to withstand a downturn.
People have the perception that banks are dangerous black boxes. That’s true of many too-big-to-fail banks. However, for People’s United, a crisis is actually an opportunity because they remain solvent and can absorb more business from their struggling peers.
In any case, they kept their now-27 year annual dividend hike streak alive during 2008 and 2009. PBCT stock now yields 4.4% and comes with an annual, if modest, increase. The knock on the bank now is that it is too conservative and doesn’t grow quickly enough. But as 2008 proved, that “weakness” is in fact the bank’s true strength.
Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek. At the time of this writing, he owned ENB, PBCT, UL, and DEO stock.
The post 7 Super Stable Dividend Stocks to Buy Now appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (DEO) Source: Shutterstock Dividend Yield: 3.8% Moving to harder beverages, we have international spirits leader Diageo (NYSE:DEO). Even, or maybe especially, during hard times, DEO is one of the most reliavle dividend stocks to buy. At the time of this writing, he owned ENB, PBCT, UL, and DEO stock.
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Diageo (DEO) Source: Shutterstock Dividend Yield: 3.8% Moving to harder beverages, we have international spirits leader Diageo (NYSE:DEO). Even, or maybe especially, during hard times, DEO is one of the most reliavle dividend stocks to buy. At the time of this writing, he owned ENB, PBCT, UL, and DEO stock.
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Diageo (DEO) Source: Shutterstock Dividend Yield: 3.8% Moving to harder beverages, we have international spirits leader Diageo (NYSE:DEO). Even, or maybe especially, during hard times, DEO is one of the most reliavle dividend stocks to buy. At the time of this writing, he owned ENB, PBCT, UL, and DEO stock.
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Diageo (DEO) Source: Shutterstock Dividend Yield: 3.8% Moving to harder beverages, we have international spirits leader Diageo (NYSE:DEO). Even, or maybe especially, during hard times, DEO is one of the most reliavle dividend stocks to buy. At the time of this writing, he owned ENB, PBCT, UL, and DEO stock.
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727725.0
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2020-03-27 00:00:00 UTC
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Consumer Sector Update for 03/27/2020: LITB, DEO, HLT, WMT, MCD, DIS, CVS, KO
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DEO
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https://www.nasdaq.com/articles/consumer-sector-update-for-03-27-2020%3A-litb-deo-hlt-wmt-mcd-dis-cvs-ko-2020-03-27
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nan
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nan
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Top Consumer Stocks:
WMT: -0.8%
MCD: -3.4%
DIS: -2.9%
CVS: -4.1%
KO: -1.8%
Top consumer stocks were declining pre-market Friday.
Early movers include:
(+) LightInTheBox Holding (LITB), which was surging by more than 56% after saying it is making medical supplies globally available to support the fight against the COVID-19 pandemic and is in talks with suppliers across China to secure sizeable stocks of the medical supplies.
(-) Diageo (DEO) was retreating by over 5% after saying its finance unit issued three tranches of bonds worth more than $2 billion.
(-) Hilton Worldwide Holdings (HLT) was down more than 2% as it suspended all share buybacks and dividend payments to significantly reduce expenses and preserve liquidity due to COVID-19, while its CEO Christopher Nassetta will forgo his salary for the remainder of 2020 and its executive committee will take a 50% pay cut for the duration of the crisis.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(-) Diageo (DEO) was retreating by over 5% after saying its finance unit issued three tranches of bonds worth more than $2 billion. Early movers include: (+) LightInTheBox Holding (LITB), which was surging by more than 56% after saying it is making medical supplies globally available to support the fight against the COVID-19 pandemic and is in talks with suppliers across China to secure sizeable stocks of the medical supplies. (-) Hilton Worldwide Holdings (HLT) was down more than 2% as it suspended all share buybacks and dividend payments to significantly reduce expenses and preserve liquidity due to COVID-19, while its CEO Christopher Nassetta will forgo his salary for the remainder of 2020 and its executive committee will take a 50% pay cut for the duration of the crisis.
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(-) Diageo (DEO) was retreating by over 5% after saying its finance unit issued three tranches of bonds worth more than $2 billion. Top Consumer Stocks: Top consumer stocks were declining pre-market Friday.
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(-) Diageo (DEO) was retreating by over 5% after saying its finance unit issued three tranches of bonds worth more than $2 billion. Early movers include: (+) LightInTheBox Holding (LITB), which was surging by more than 56% after saying it is making medical supplies globally available to support the fight against the COVID-19 pandemic and is in talks with suppliers across China to secure sizeable stocks of the medical supplies. (-) Hilton Worldwide Holdings (HLT) was down more than 2% as it suspended all share buybacks and dividend payments to significantly reduce expenses and preserve liquidity due to COVID-19, while its CEO Christopher Nassetta will forgo his salary for the remainder of 2020 and its executive committee will take a 50% pay cut for the duration of the crisis.
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(-) Diageo (DEO) was retreating by over 5% after saying its finance unit issued three tranches of bonds worth more than $2 billion. Top Consumer Stocks: Top consumer stocks were declining pre-market Friday.
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58129661-0ddf-4058-b1ca-e49556fd5a83
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727726.0
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2020-03-24 00:00:00 UTC
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Anheuser-Busch, Distilleries Offer Hand Sanitizer To Fight Coronavirus
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DEO
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https://www.nasdaq.com/articles/anheuser-busch-distilleries-offer-hand-sanitizer-to-fight-coronavirus-2020-03-24
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nan
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(RTTNews) - Breweries Anheuser-Busch, Diageo and certain distilleries across the world are producing and donating hand sanitizer to help fight the coronavirus or Covid-19 pandemic.
In a tweet, US-based Anheuser-Busch said, "We have a long history of supporting our communities and employees - this time is no different. That's why we are using our supply and logistics network to begin producing and distributing bottles of hand sanitizer to accommodate the growing needs across the United States."
Anheuser-Busch's hand sanitizer will be packaged in 8-ounce bottles, and the containers bear logos and design motifs similar to that of its beer brands.
The company said it would consult with the American Red Cross and other nonprofit partners to find out the needy places for its sanitizer.
As per the packaging, Anheuser-Busch's sanitizer will consist of a non-sterile 80% alcohol antiseptic solution, higher than the recommendation by the U.S. Centers for Disease Control and Prevention or CDC of a minimum 60% alcohol-based sanitizer to fight the virus effectively.
In early March, Anheuser-Busch, at the request of the American Red Cross, had delivered more than 150,000 cans of emergency drinking water to support tornado relief efforts in Tennessee.
British brewery Diageo has pledged to donate required alcohol to make more than eight million 250ml bottles of hand sanitizer for healthcare workers.
More US companies are now producing hand sanitizer following the announcement by the US Alcohol and Tobacco Tax and Trade Bureau on March 18 that those with permits to distill spirits can immediately begin production of hand sanitizer or distilled spirits or ethanol for use in hand sanitizer.
Austin, Texas-based Tito's Vodka said it will produce and donate at least 24 tons of actual hand sanitizer. In early March, Tito's had told its customers not to use their vodka as substitute for hand sanitizer for protection against coronavirus as it contains only 40% alcohol.
Various distilleries including Greenhook Ginsmiths, New York Distilling Co., and Lexington Brewing & Distilling Co. are also making hand sanitizer to fight the coronavirus.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Breweries Anheuser-Busch, Diageo and certain distilleries across the world are producing and donating hand sanitizer to help fight the coronavirus or Covid-19 pandemic. In early March, Anheuser-Busch, at the request of the American Red Cross, had delivered more than 150,000 cans of emergency drinking water to support tornado relief efforts in Tennessee. British brewery Diageo has pledged to donate required alcohol to make more than eight million 250ml bottles of hand sanitizer for healthcare workers.
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(RTTNews) - Breweries Anheuser-Busch, Diageo and certain distilleries across the world are producing and donating hand sanitizer to help fight the coronavirus or Covid-19 pandemic. More US companies are now producing hand sanitizer following the announcement by the US Alcohol and Tobacco Tax and Trade Bureau on March 18 that those with permits to distill spirits can immediately begin production of hand sanitizer or distilled spirits or ethanol for use in hand sanitizer. Various distilleries including Greenhook Ginsmiths, New York Distilling Co., and Lexington Brewing & Distilling Co. are also making hand sanitizer to fight the coronavirus.
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(RTTNews) - Breweries Anheuser-Busch, Diageo and certain distilleries across the world are producing and donating hand sanitizer to help fight the coronavirus or Covid-19 pandemic. As per the packaging, Anheuser-Busch's sanitizer will consist of a non-sterile 80% alcohol antiseptic solution, higher than the recommendation by the U.S. Centers for Disease Control and Prevention or CDC of a minimum 60% alcohol-based sanitizer to fight the virus effectively. More US companies are now producing hand sanitizer following the announcement by the US Alcohol and Tobacco Tax and Trade Bureau on March 18 that those with permits to distill spirits can immediately begin production of hand sanitizer or distilled spirits or ethanol for use in hand sanitizer.
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(RTTNews) - Breweries Anheuser-Busch, Diageo and certain distilleries across the world are producing and donating hand sanitizer to help fight the coronavirus or Covid-19 pandemic. In early March, Anheuser-Busch, at the request of the American Red Cross, had delivered more than 150,000 cans of emergency drinking water to support tornado relief efforts in Tennessee. Various distilleries including Greenhook Ginsmiths, New York Distilling Co., and Lexington Brewing & Distilling Co. are also making hand sanitizer to fight the coronavirus.
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3994f5e8-6986-4620-9067-9869cc8e72a2
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727727.0
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2020-03-20 00:00:00 UTC
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Distillers Seek Regulatory Fix to Produce Hand Sanitizer
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DEO
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https://www.nasdaq.com/articles/distillers-seek-regulatory-fix-to-produce-hand-sanitizer-2020-03-20
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nan
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nan
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One of the items that seemed to disappear from supermarket shelves first and still remains difficult to find is hand sanitizer. The nation's distillers are asking the Trump administration for an "emergency fix" to regulations that would allow them to produce this high-demand item without penalty.
The taxman cometh
The Distilled Spirits Council of the US (DISCUS), which represents industry giants like Bacardi, Brown-Forman (NYSE: BF.A)(NYSE: BF.B), Constellation Brands (NYSE: STZ), and Diageo (NYSE: DEO), says federal regulations impose an excise tax on hand sanitizer if it is made with ethanol.
Image source: Getty Images.
While the Treasury Department's Tax & Trade Bureau (TTB) was able to waive the excise tax on sanitizer made with denatured ethanol, it was unable to exempt the same sanitizer if it was made with undenatured ethanol.
Distillers use both kinds of alcohol in the production of spirits, and DISCUS wants its members to be able to produce hand sanitizer with whatever kind they have on hand.
It says the TTB was helpful in clearing the way by not requiring distillers to get a special permit to produce sanitizer so long as they already held a beverage producer's permit. So long as they follow the World Health Organization's recipe for hand sanitizer, which includes grain neutral spirits, glycerin, and hydrogen peroxide, there would be no barriers to production.
While DISCUS says it appreciates the help it's received from TTB, the organization notes the industry is being strained by closures of restaurants and bars, and that "forcing them to pay taxes on the hand sanitizer is just plain wrong."
Recently luxury goods maker LVMH (OTC: LVMUY) retooled its cosmetics and perfume factories to produce hand sanitizer in France.
10 stocks we like better than Walmart
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Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Constellation Brands. The Motley Fool recommends Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The taxman cometh The Distilled Spirits Council of the US (DISCUS), which represents industry giants like Bacardi, Brown-Forman (NYSE: BF.A)(NYSE: BF.B), Constellation Brands (NYSE: STZ), and Diageo (NYSE: DEO), says federal regulations impose an excise tax on hand sanitizer if it is made with ethanol. So long as they follow the World Health Organization's recipe for hand sanitizer, which includes grain neutral spirits, glycerin, and hydrogen peroxide, there would be no barriers to production. While DISCUS says it appreciates the help it's received from TTB, the organization notes the industry is being strained by closures of restaurants and bars, and that "forcing them to pay taxes on the hand sanitizer is just plain wrong."
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The taxman cometh The Distilled Spirits Council of the US (DISCUS), which represents industry giants like Bacardi, Brown-Forman (NYSE: BF.A)(NYSE: BF.B), Constellation Brands (NYSE: STZ), and Diageo (NYSE: DEO), says federal regulations impose an excise tax on hand sanitizer if it is made with ethanol. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. The Motley Fool recommends Diageo.
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The taxman cometh The Distilled Spirits Council of the US (DISCUS), which represents industry giants like Bacardi, Brown-Forman (NYSE: BF.A)(NYSE: BF.B), Constellation Brands (NYSE: STZ), and Diageo (NYSE: DEO), says federal regulations impose an excise tax on hand sanitizer if it is made with ethanol. Distillers use both kinds of alcohol in the production of spirits, and DISCUS wants its members to be able to produce hand sanitizer with whatever kind they have on hand. See the 10 stocks Stock Advisor returns as of 2/1/20 Rich Duprey has no position in any of the stocks mentioned.
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The taxman cometh The Distilled Spirits Council of the US (DISCUS), which represents industry giants like Bacardi, Brown-Forman (NYSE: BF.A)(NYSE: BF.B), Constellation Brands (NYSE: STZ), and Diageo (NYSE: DEO), says federal regulations impose an excise tax on hand sanitizer if it is made with ethanol. Distillers use both kinds of alcohol in the production of spirits, and DISCUS wants its members to be able to produce hand sanitizer with whatever kind they have on hand. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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f5ed072b-f0ad-4a6a-83a1-40982cca7f89
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727728.0
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2020-03-19 00:00:00 UTC
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Distillers Seek Federal Bailout, Economic Reforms
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DEO
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https://www.nasdaq.com/articles/distillers-seek-federal-bailout-economic-reforms-2020-03-19
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nan
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nan
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Like many of the industries lining up to ask the federal government for a bailout, the distillers trade group says failure to provide financial assistance will cause not only alcoholic beverage makers, but farmers, bottle makers, truckers, warehouse workers, and others to suffer from the cascading effects of the coronavirus outbreak.
But unlike others asking taxpayers to support them, the group is also offering alternatives that would strengthen the industry in the future.
Image source: Getty Images.
Alternatives to cash payments
The Distilled Spirits Council of the United States (DISCUS), which represents spirits makers such as Beam Suntory, Diageo (NYSE: DEO), the Moet Hennessy division of LVMH
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Alternatives to cash payments The Distilled Spirits Council of the United States (DISCUS), which represents spirits makers such as Beam Suntory, Diageo (NYSE: DEO), the Moet Hennessy division of LVMH Like many of the industries lining up to ask the federal government for a bailout, the distillers trade group says failure to provide financial assistance will cause not only alcoholic beverage makers, but farmers, bottle makers, truckers, warehouse workers, and others to suffer from the cascading effects of the coronavirus outbreak. But unlike others asking taxpayers to support them, the group is also offering alternatives that would strengthen the industry in the future.
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Alternatives to cash payments The Distilled Spirits Council of the United States (DISCUS), which represents spirits makers such as Beam Suntory, Diageo (NYSE: DEO), the Moet Hennessy division of LVMH Like many of the industries lining up to ask the federal government for a bailout, the distillers trade group says failure to provide financial assistance will cause not only alcoholic beverage makers, but farmers, bottle makers, truckers, warehouse workers, and others to suffer from the cascading effects of the coronavirus outbreak. Image source: Getty Images.
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Alternatives to cash payments The Distilled Spirits Council of the United States (DISCUS), which represents spirits makers such as Beam Suntory, Diageo (NYSE: DEO), the Moet Hennessy division of LVMH Like many of the industries lining up to ask the federal government for a bailout, the distillers trade group says failure to provide financial assistance will cause not only alcoholic beverage makers, but farmers, bottle makers, truckers, warehouse workers, and others to suffer from the cascading effects of the coronavirus outbreak. Image source: Getty Images.
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Alternatives to cash payments The Distilled Spirits Council of the United States (DISCUS), which represents spirits makers such as Beam Suntory, Diageo (NYSE: DEO), the Moet Hennessy division of LVMH Like many of the industries lining up to ask the federal government for a bailout, the distillers trade group says failure to provide financial assistance will cause not only alcoholic beverage makers, but farmers, bottle makers, truckers, warehouse workers, and others to suffer from the cascading effects of the coronavirus outbreak. But unlike others asking taxpayers to support them, the group is also offering alternatives that would strengthen the industry in the future.
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810f0ae5-73fd-4b0a-914e-bbec6831e9c9
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727729.0
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2020-03-19 00:00:00 UTC
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Diageo a Top Ranked SAFE Dividend Stock With 2.8% Yield (DEO)
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DEO
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https://www.nasdaq.com/articles/diageo-a-top-ranked-safe-dividend-stock-with-2.8-yield-deo-2020-03-19
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nan
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nan
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Diageo plc (Symbol: DEO) has been named to the Dividend Channel ''International S.A.F.E. 10'' list, signifying an international stock with above-average ''DividendRank'' statistics including a strong 2.8% yield, as well as a superb track record of at least five years of dividend growth, according to the most recent ''DividendRank'' report.
According to the ETF Finder at ETF Channel, Diageo plc is an underlying holding representing 0.96% of the Powershares International Dividend Achievers ETF (PID), which holds $4,733,338 worth of DEO shares.
Diageo plc (Symbol: DEO) made the "Dividend Channel International S.A.F.E. 10" list because of these qualities: S. Solid return — hefty yield and strong DividendRank characteristics; A. Accelerating amount — consistent dividend increases over time; F. Flawless five year history — never a missed or lowered dividend; E. Enduring — at least a half-decade of dividend payments.
Start slideshow:
Ten Top S.A.F.E. International Dividend Stocks »
The annualized dividend paid by Diageo plc is $2.87/share, currently paid in semi-annual installments, and its most recent dividend ex-date was on 02/27/2020. Below is a long-term dividend history chart for DEO, which the report stressed as being of key importance.
DEO operates in the Beverages & Wineries sector, among companies like Coca-Cola Co (KO), and PepsiCo Inc (PEP).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Below is a long-term dividend history chart for DEO, which the report stressed as being of key importance. DEO operates in the Beverages & Wineries sector, among companies like Coca-Cola Co (KO), and PepsiCo Inc (PEP). Diageo plc (Symbol: DEO) has been named to the Dividend Channel ''International S.A.F.E.
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Diageo plc (Symbol: DEO) has been named to the Dividend Channel ''International S.A.F.E. Diageo plc (Symbol: DEO) made the "Dividend Channel International S.A.F.E. According to the ETF Finder at ETF Channel, Diageo plc is an underlying holding representing 0.96% of the Powershares International Dividend Achievers ETF (PID), which holds $4,733,338 worth of DEO shares.
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According to the ETF Finder at ETF Channel, Diageo plc is an underlying holding representing 0.96% of the Powershares International Dividend Achievers ETF (PID), which holds $4,733,338 worth of DEO shares. Diageo plc (Symbol: DEO) has been named to the Dividend Channel ''International S.A.F.E. Diageo plc (Symbol: DEO) made the "Dividend Channel International S.A.F.E.
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Diageo plc (Symbol: DEO) has been named to the Dividend Channel ''International S.A.F.E. Diageo plc (Symbol: DEO) made the "Dividend Channel International S.A.F.E. According to the ETF Finder at ETF Channel, Diageo plc is an underlying holding representing 0.96% of the Powershares International Dividend Achievers ETF (PID), which holds $4,733,338 worth of DEO shares.
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86c115b0-09ea-4dee-984d-41e6d0eb2109
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727730.0
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2020-03-18 00:00:00 UTC
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Is Diageo Stock a Buy?
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DEO
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https://www.nasdaq.com/articles/is-diageo-stock-a-buy-2020-03-18
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nan
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nan
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Even a platform of renowned alcohol brands isn't shielding British spirits giant Diageo (NYSE: DEO) from the economic pain of the coronavirus outbreak. The company recently said it expects a negative impact in fiscal 2020 of as much as $398 million on organic net sales and up to $245 million on organic operating profit.
Shutdowns of bars and restaurants that began in China and have spread to other countries (including the U.S.), cancellation of conferences and events, as well as a significant drop in travel, are all weighing on sales. Like most of the market, Diageo's shares have tumbled and are now down 24% year-to-date.
So is it time to scoop up Diageo shares? Let's take a closer look at where the company is right now and what's potentially still to come.
Image source: Getty Images.
No. 1 spirits maker
Diageo is the world's No. 1 spirits maker, with global volume market share of 27%. But the company has room for growth, considering it still only produces 1.7% of total beverage alcohol served worldwide. In its 2019 annual report, Diageo outlined some of the elements that could lift sales in the coming years. The company predicts 750 million consumers in emerging markets will be able to afford its products and those of rivals by 2030. Diageo also has noticed that U.S. consumers are moving from beer to spirits, European customers are switching from beer and wine to spirits, and in some parts of Africa, people are moving away from illegal alcohol to regulated, quality products.
IWSR, a drinks market analyst based in the U.K., found support for those observations in its data. According to the report, spirits posted growth in 2018, while the consumption of wine and beer fell.
In more good news for Diageo, gin represented the biggest growth category, climbing 8.3%, and is expected to continue gains. Diageo owns the Gordon's and Tanqueray gin brands. Gordon's posted nearly 27% volume growth in 2018, making it the No. 1 player, while Tanqueray took the third spot, according to The Spirits Business.
Leadership in many categories
Diageo is the owner of other leading brands, as well. Its whiskeys hold 38% of the market for the top spot, while Smirnoff remains the biggest seller in vodka, and Baileys holds the title of most popular cream liqueur brand.
This diversification of beverage types and leadership in many categories is another positive, as it allows Diageo to benefit rather than suffer when one trend ends and another begins. For instance, vodka was the drink to have at a party in the 1990s, but these days, vodka sales have slowed and (as mentioned above) gin is the cool drink to order.
Diageo has the market share and diversification -- but what about revenue and earnings? It isn't a high-growth company offering double-digit sales increases, but instead, it's a steady long-term play. The company has grown revenue since at least 2009 and gained in earnings per share since 2017.
In its latest report, the company said net sales climbed 4.2% for the half-year, with all regions positively contributing. Earnings per share slipped about 2% due to an exceptional gain in the year-earlier period.
Considering the novel coronavirus pandemic situation, earnings probably won't be a bright spot in the immediate future, but the disturbance is clearly temporary. In the meantime, investors can benefit from Diageo's plan to return as much as $5.5 billion to investors over a period of three years. The first phase wrapped up in January, allowing Diageo to buy back $1.53 billion in shares.
An opportunity
Diageo currently is trading at about 19 times earnings, its lowest level since December 2016. By that measure, it's trading at a discount compared to rival Constellation Brands (NYSE: STZ), which has a price to earnings ratio of about 30. Wall Street predicts 32% upside for Diageo from this level.
I don't see that sort of gain in the near future, considering the ride through the next earnings season will likely be bumpy. But weakness in the shares now is an opportunity for long-term investors. Diageo has the right cocktail of product diversification, market share, and steady revenue to make it a consumer staple stock to add to your portfolio and hold onto for quite a while.
10 stocks we like better than Diageo
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Diageo wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of December 1, 2019
Adria Cimino has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Constellation Brands. The Motley Fool recommends Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Even a platform of renowned alcohol brands isn't shielding British spirits giant Diageo (NYSE: DEO) from the economic pain of the coronavirus outbreak. Shutdowns of bars and restaurants that began in China and have spread to other countries (including the U.S.), cancellation of conferences and events, as well as a significant drop in travel, are all weighing on sales. Diageo has the right cocktail of product diversification, market share, and steady revenue to make it a consumer staple stock to add to your portfolio and hold onto for quite a while.
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Even a platform of renowned alcohol brands isn't shielding British spirits giant Diageo (NYSE: DEO) from the economic pain of the coronavirus outbreak. In more good news for Diageo, gin represented the biggest growth category, climbing 8.3%, and is expected to continue gains. Diageo has the right cocktail of product diversification, market share, and steady revenue to make it a consumer staple stock to add to your portfolio and hold onto for quite a while.
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Even a platform of renowned alcohol brands isn't shielding British spirits giant Diageo (NYSE: DEO) from the economic pain of the coronavirus outbreak. Diageo also has noticed that U.S. consumers are moving from beer to spirits, European customers are switching from beer and wine to spirits, and in some parts of Africa, people are moving away from illegal alcohol to regulated, quality products. Diageo has the market share and diversification -- but what about revenue and earnings?
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Even a platform of renowned alcohol brands isn't shielding British spirits giant Diageo (NYSE: DEO) from the economic pain of the coronavirus outbreak. Diageo has the market share and diversification -- but what about revenue and earnings? The company has grown revenue since at least 2009 and gained in earnings per share since 2017.
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727731.0
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2020-03-05 00:00:00 UTC
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Relative Strength Alert For Diageo
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DEO
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https://www.nasdaq.com/articles/relative-strength-alert-for-diageo-2020-03-05
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nan
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nan
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Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In trading on Thursday, shares of Diageo plc (Symbol: DEO) entered into oversold territory, hitting an RSI reading of 29.99, after changing hands as low as $143.11 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 36.8. A bullish investor could look at DEO's 29.99 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of DEO shares:
Looking at the chart above, DEO's low point in its 52 week range is $138.91 per share, with $176.22 as the 52 week high point — that compares with a last trade of $144.01.
Find out what 9 other oversold stocks you need to know about »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In trading on Thursday, shares of Diageo plc (Symbol: DEO) entered into oversold territory, hitting an RSI reading of 29.99, after changing hands as low as $143.11 per share. A bullish investor could look at DEO's 29.99 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of DEO shares: Looking at the chart above, DEO's low point in its 52 week range is $138.91 per share, with $176.22 as the 52 week high point — that compares with a last trade of $144.01.
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A bullish investor could look at DEO's 29.99 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of DEO shares: Looking at the chart above, DEO's low point in its 52 week range is $138.91 per share, with $176.22 as the 52 week high point — that compares with a last trade of $144.01. In trading on Thursday, shares of Diageo plc (Symbol: DEO) entered into oversold territory, hitting an RSI reading of 29.99, after changing hands as low as $143.11 per share.
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In trading on Thursday, shares of Diageo plc (Symbol: DEO) entered into oversold territory, hitting an RSI reading of 29.99, after changing hands as low as $143.11 per share. A bullish investor could look at DEO's 29.99 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of DEO shares: Looking at the chart above, DEO's low point in its 52 week range is $138.91 per share, with $176.22 as the 52 week high point — that compares with a last trade of $144.01.
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In trading on Thursday, shares of Diageo plc (Symbol: DEO) entered into oversold territory, hitting an RSI reading of 29.99, after changing hands as low as $143.11 per share. A bullish investor could look at DEO's 29.99 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of DEO shares: Looking at the chart above, DEO's low point in its 52 week range is $138.91 per share, with $176.22 as the 52 week high point — that compares with a last trade of $144.01.
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727732.0
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2020-02-26 00:00:00 UTC
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What's Aiding The $685 Million Revenue Expansion For Diageo In 2020?
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DEO
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https://www.nasdaq.com/articles/whats-aiding-the-%24685-million-revenue-expansion-for-diageo-in-2020-2020-02-27
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nan
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After adding $1.5 billion to its top line between 2016 and 2018, Diageo (NYSE: DEO), the alcoholic beverages giant, saw its revenue base shrink by about $300 million in FY 2019 (financial year ends in June). However, Trefis expects Diageo to see revenue expansion in 2020, with revenue rising by about $685 million to $17.3 billion for FY 2020. Higher revenue is likely to be contributed mainly by the North America and Asia-Pacific regions, driven by volume growth as well as higher revenue per unit.
View the Trefis interactive dashboard on Diageo Revenues for further details on revenue performance of all operating divisions of the company, where you can alter the key assumptions and arrive at your own estimate for Diageo’s revenues.
Company Overview
Diageo is the world’s largest producer of spirits and a major producer of beer and wine, and its brands include Smirnoff (the world’s best-selling vodka), Johnnie Walker (the world’s #1 blended scotch whiskey), Baileys (the world’s best-selling liqueur), and Guinness (the world’s #1 stout).
Diageo is the world’s largest whiskey producer with 28 malt distilleries. Diageo offers a wide variety of alcohol products, ranging from value to ultra-premium categories that cater to a large alcohol-drinking customer base. On the basis of quality and price, Diageo’s beverage offerings can be differentiated into: Ultra-Premium Brands; Super Premium Brands; Premium Brands; Standard Brands; and Value Brands.
Segment-Wise Revenue Breakup
North America
Revenue increased from $5.3 billion in 2016 to $5.8 billion in 2019, adding $0.5 billion in 3 years, with segment revenue expected to increase to $6 billion in FY 2020.
Future revenue growth is expected to be driven by an increase in the share of scotch and growth in both Diageo Beer Company USA (DBC USA) and Canada.
NA is likely to remain as the largest contributor of revenue with a share of 34%-35% in DEO’s revenues. Largest share is due to higher sale of its premium brands in the region which drives maximum price realization among all divisions.
Volume sales of the segment is also expected to see a marginal uptick in 2020.
To understand what is the importance of North America in Diageo’s business, refer to our dashboard analysis which also provides insights in segment’s profitability.
Europe
Revenue increased from $3.7 billion in 2016 to $4.1 billion in 2018 before dropping to $3.8 billion in 2019, due to slowing European economy and Brexit concerns.
However, revenue is expected to rise to $3.9 billion in FY 2020.
Revenue growth would be driven by strong performance in Turkey, Great Britain, Ireland, and Continental Europe. Gin is expected to be the best performing product, with Tanqueray gaining share in the fastest growing category and Gordon’s benefiting from the launch of its Pink variant.
Asia-Pacific (APAC)
Revenue increased from $3.1 billion in 2016 to $3.5 billion in 2019, adding $0.4 billion in 3 years. Future Revenue growth is expected to be driven by an increase in the share of scotch, along with strong growth in China and India. Sales in India are expected to rise due to the relaxation in the earlier rule which banned alcohol sales near highways.
APAC’s volume sales continuously declined from 104 million units in FY 2016 to 91 million units in FY 2018, before rising to 95 million in FY 2019.
APAC has been the largest contributor to Diageo’s volume sales historically, though its share went down from 42% in FY 2016 to 37.6% in FY 2018, before rising to 38.7% in FY 2019.
Higher demand in China and India, along with strong growth in Australia is likely to drive volume sales back to 100 million units in FY 2020, with division’s share still being the highest at 39.3%
With rising revenues, APAC’s share in total revenues has also increased from 19.8% in 2016 to 20.9% in 2019.
This metric is further expected to rise to 21.4%, as APAC is likely to be the fastest growing segment for Diageo.
To understand what is the importance of Asia-Pacific in Diageo’s business, refer to our dashboard analysis which also provides insights in segment’s profitability.
Africa
In the recent past, growth has been sluggish due to the impact of the uncertainty following the presidential election in Kenya.
Future growth would be led by rising beer sales with strong growth of Dubic in Nigeria and the successful launch of Serengeti Lite in Tanzania.
Latin America
Volume growth to be driven by strong performances in Mexico, PUB, and PEBAC.
Additionally, scotch, gin, and Smirnoff continue to gain market share in the region.
However, revenue growth to be sluggish due to volatility in revenue per unit.
Thus, the company’s near-term revenue growth heavily depends primarily on North America and Asia-Pacific, with growth Europe, Latin America, and Africa remaining sluggish.
Diageo’s expenses as a percentage of revenue are also expected to see a reduction in 2020, leading to higher margins for the year. As per Diageo valuation by Trefis, higher revenues and improving margins are the primary factors behind the $172 per share price estimate for the company’s stock.
See all Trefis Price Estimates and Download Trefis Data here
What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs For CFOs and Finance Teams | Product, R&D, and Marketing Teams
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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After adding $1.5 billion to its top line between 2016 and 2018, Diageo (NYSE: DEO), the alcoholic beverages giant, saw its revenue base shrink by about $300 million in FY 2019 (financial year ends in June). NA is likely to remain as the largest contributor of revenue with a share of 34%-35% in DEO’s revenues. Diageo offers a wide variety of alcohol products, ranging from value to ultra-premium categories that cater to a large alcohol-drinking customer base.
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After adding $1.5 billion to its top line between 2016 and 2018, Diageo (NYSE: DEO), the alcoholic beverages giant, saw its revenue base shrink by about $300 million in FY 2019 (financial year ends in June). NA is likely to remain as the largest contributor of revenue with a share of 34%-35% in DEO’s revenues. Segment-Wise Revenue Breakup North America Revenue increased from $5.3 billion in 2016 to $5.8 billion in 2019, adding $0.5 billion in 3 years, with segment revenue expected to increase to $6 billion in FY 2020.
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After adding $1.5 billion to its top line between 2016 and 2018, Diageo (NYSE: DEO), the alcoholic beverages giant, saw its revenue base shrink by about $300 million in FY 2019 (financial year ends in June). NA is likely to remain as the largest contributor of revenue with a share of 34%-35% in DEO’s revenues. View the Trefis interactive dashboard on Diageo Revenues for further details on revenue performance of all operating divisions of the company, where you can alter the key assumptions and arrive at your own estimate for Diageo’s revenues.
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After adding $1.5 billion to its top line between 2016 and 2018, Diageo (NYSE: DEO), the alcoholic beverages giant, saw its revenue base shrink by about $300 million in FY 2019 (financial year ends in June). NA is likely to remain as the largest contributor of revenue with a share of 34%-35% in DEO’s revenues. Higher revenue is likely to be contributed mainly by the North America and Asia-Pacific regions, driven by volume growth as well as higher revenue per unit.
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727733.0
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2020-02-26 00:00:00 UTC
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Diageo Warns Of Negative Coronavirus Impact On FY20 Results - Quick Facts
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DEO
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https://www.nasdaq.com/articles/diageo-warns-of-negative-coronavirus-impact-on-fy20-results-quick-facts-2020-02-26
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nan
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) on Wednesday provided an update on the expected range of the adverse impact in fiscal 2020 due to the evolving COVID-19 situation.
The company estimates the negative impact of the COVID-19 in fiscal 2020, on the group's organic net sales in a range of 225 million pounds to 325 million pounds and on organic operating profit in a range of 140 million pounds to 200 million pounds, with the timing and pace of recovery determining the impact within these estimated ranges.
The company noted that in Greater China, bars and restaurants have largely been closed and resulted in a substantial reduction in banqueting. The company said it has seen significant disruption since the end of January which it expects to last at least into March. Thereafter, the company expects gradual improvement with consumption returning to normal levels towards the end of fiscal 2020.
Diageo noted that outbreak in several other Asian countries, especially South Korea, Japan and Thailand, has led to events being postponed, a reduction in conferences and banquets, and a drop in tourism which have all impacted on-trade consumption. The company expects gradual improvement throughout the fourth quarter of fiscal 2020.
Diageo also expects the recovery of passenger traffic, mainly in the Asian region, to be gradual, resulting in weaker performance for the remainder of fiscal 2020.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) on Wednesday provided an update on the expected range of the adverse impact in fiscal 2020 due to the evolving COVID-19 situation. Diageo noted that outbreak in several other Asian countries, especially South Korea, Japan and Thailand, has led to events being postponed, a reduction in conferences and banquets, and a drop in tourism which have all impacted on-trade consumption. Diageo also expects the recovery of passenger traffic, mainly in the Asian region, to be gradual, resulting in weaker performance for the remainder of fiscal 2020.
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) on Wednesday provided an update on the expected range of the adverse impact in fiscal 2020 due to the evolving COVID-19 situation. The company estimates the negative impact of the COVID-19 in fiscal 2020, on the group's organic net sales in a range of 225 million pounds to 325 million pounds and on organic operating profit in a range of 140 million pounds to 200 million pounds, with the timing and pace of recovery determining the impact within these estimated ranges. Thereafter, the company expects gradual improvement with consumption returning to normal levels towards the end of fiscal 2020.
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) on Wednesday provided an update on the expected range of the adverse impact in fiscal 2020 due to the evolving COVID-19 situation. The company estimates the negative impact of the COVID-19 in fiscal 2020, on the group's organic net sales in a range of 225 million pounds to 325 million pounds and on organic operating profit in a range of 140 million pounds to 200 million pounds, with the timing and pace of recovery determining the impact within these estimated ranges. Thereafter, the company expects gradual improvement with consumption returning to normal levels towards the end of fiscal 2020.
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) on Wednesday provided an update on the expected range of the adverse impact in fiscal 2020 due to the evolving COVID-19 situation. The company estimates the negative impact of the COVID-19 in fiscal 2020, on the group's organic net sales in a range of 225 million pounds to 325 million pounds and on organic operating profit in a range of 140 million pounds to 200 million pounds, with the timing and pace of recovery determining the impact within these estimated ranges. Thereafter, the company expects gradual improvement with consumption returning to normal levels towards the end of fiscal 2020.
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bdabcdd8-6cad-4fae-bc95-6447ce79762b
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727734.0
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2020-02-20 00:00:00 UTC
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SEC : Diageo Agrees To Pay $5 Mln Fine Over 'misleading' Sales
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DEO
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https://www.nasdaq.com/articles/sec-%3A-diageo-agrees-to-pay-%245-mln-fine-over-misleading-sales-2020-02-20
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nan
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(RTTNews) - Diageo plc (DGE.L, DEO) agreed to pay $5 million to settle U.S. Securities and Exchange Commission charges that the British alcoholic beverages company failed to make required disclosures related to the shipments of unneeded products by its North American subsidiary to distributors.
The SEC said in an order that employees at Diageo North America pressured distributors to buy products in excess of demand in order to meet internal sales targets in the face of declining market conditions.
The resulting increase in shipments enabled Diageo to meet performance targets and to report higher growth in key performance indicators that were closely followed by investors and analysts, the SEC said in the order.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Diageo plc (DGE.L, DEO) agreed to pay $5 million to settle U.S. Securities and Exchange Commission charges that the British alcoholic beverages company failed to make required disclosures related to the shipments of unneeded products by its North American subsidiary to distributors. The SEC said in an order that employees at Diageo North America pressured distributors to buy products in excess of demand in order to meet internal sales targets in the face of declining market conditions. The resulting increase in shipments enabled Diageo to meet performance targets and to report higher growth in key performance indicators that were closely followed by investors and analysts, the SEC said in the order.
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(RTTNews) - Diageo plc (DGE.L, DEO) agreed to pay $5 million to settle U.S. Securities and Exchange Commission charges that the British alcoholic beverages company failed to make required disclosures related to the shipments of unneeded products by its North American subsidiary to distributors. The SEC said in an order that employees at Diageo North America pressured distributors to buy products in excess of demand in order to meet internal sales targets in the face of declining market conditions. The resulting increase in shipments enabled Diageo to meet performance targets and to report higher growth in key performance indicators that were closely followed by investors and analysts, the SEC said in the order.
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(RTTNews) - Diageo plc (DGE.L, DEO) agreed to pay $5 million to settle U.S. Securities and Exchange Commission charges that the British alcoholic beverages company failed to make required disclosures related to the shipments of unneeded products by its North American subsidiary to distributors. The SEC said in an order that employees at Diageo North America pressured distributors to buy products in excess of demand in order to meet internal sales targets in the face of declining market conditions. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Diageo plc (DGE.L, DEO) agreed to pay $5 million to settle U.S. Securities and Exchange Commission charges that the British alcoholic beverages company failed to make required disclosures related to the shipments of unneeded products by its North American subsidiary to distributors. The SEC said in an order that employees at Diageo North America pressured distributors to buy products in excess of demand in order to meet internal sales targets in the face of declining market conditions. The resulting increase in shipments enabled Diageo to meet performance targets and to report higher growth in key performance indicators that were closely followed by investors and analysts, the SEC said in the order.
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3dd4eb98-832b-4c50-ab46-e8d2196114b4
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727735.0
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2020-02-20 00:00:00 UTC
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10 Buy-and-Hold Stocks to Own Forever
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DEO
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https://www.nasdaq.com/articles/10-buy-and-hold-stocks-to-own-forever-2020-02-20
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nan
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nan
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[EditorâÂÂs note: âÂÂ10 Buy-and-Hold Stocks to Own Foreverâ was previously published in December 2019. It has since been updated to include the most relevant information available.]
Investing to âÂÂbuy and holdâ is trickier than it looks.àThe increasing pace of technological changeàmeans even the most successful, dominant companies have to continually adapt to keep up. Industries like energy, real estate and even consumer products areàfacing potentially significant long-termàchanges going forward.
In any era, amassing a collection of retirement stocks simply by buying the best companies and holding them for years can be a risky endeavor.
General Motorsà(NYSE:) was a classic âÂÂwidows and orphansâ stock until the last decade when GM wound up going bankrupt.àUnited States Steelà(NYSE:) once was a pillar of corporate America and a buy-and-hold stock. Polaroid and Eastman Kodakàwere once blue-chip stocks. Both went bankrupt asàcameras changed from film to digital.
But there still are stocks to buy and hold out there that can last forever, while offering dividend income along the way.
Here are ten such retirement stocks to buy and hold forever.
Bank of America (BAC)
Source: Tero Vesalainen / Shutterstock.com
Dividend Yield: 2.07%
It might seem strange to open the list with Bank of Americaà(NYSE:). After all, weâÂÂre only a bit more than a decade on from the financial crisis.
During that crisis, BofA acquisition Countrywide Financial blew up in spectacular fashion, after pioneering many of the risky tactics that led to the bubble and subsequent bust.
But this is a different BofA.
Net consumer charge-offs hit a decade-long low last year. Its performance on credit metrics is strong.àGovernment regulations have been criticized as slowing growth â but theyâÂÂve undoubtedly lowered risk as well, even if observers might argue that a better balance is needed.
No less than , through his Berkshire Hathaway Inc.à(NYSE:, NYSE:BRK.B). And the Oracle of Omaha is fond of saying that his favorite holding period is âÂÂforever.âÂÂ
That seems likely true for BAC stock as well.
Diageo (DEO)
Dividend Yield: 3.01%
Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by DiageoÃÂ (NYSE:) are well-positioned to adapt to shifting tastes.
Diageo owns classic brands like Johnnie Walker whisky, Tanqueray gin, Smirnoff vodka, and Harp and Guinness beer, among many others. What most have in common is a timeless quality and worldwide brand recognition.
As a result, while beverage giants like Coca-ColaÃÂ (NYSE:) and Anheuser Busch InBevÃÂ (NYSE:) have struggled with profit growth, Diageo grew operating profits by 5.8% in fiscal 2019 and expects consistent growth going forward.
Yet with a trailing multiple of 24.3, and with a dividend yield ofà3.01%, Diageo stock isnâÂÂt all that dearly valued. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
Medtronic (MDT)
Source: JHVEPhoto / Shutterstock.com
Dividend Yield: 1.90%
In this day and age, the U.S. healthcare market, in particular, seems potentially volatile. Concerns about increased spending and political battles over the Affordable Care Act create more questions than answers.
But even with that uncertainty, Medtronicà(NYSE:) isnâÂÂt going anywhere. The companyâÂÂs devices are an integral part of modern medicine, ranging from pacemakers to stents to bone grafts to imaging systems.
Even the risks involved in the sector look priced into MDT. MedtronicâÂÂs days of double-digit annual growth may well be behind it, but itâÂÂs not finishedàincreasing earningsàor dividends. MDT stock likely isnâÂÂt finished rising, either.
NextEra Energy (NEE)
Source: Shutterstock
Dividend Yield: 2.04%
Utility stocks are among the most common safe, buy-and-hold stocks. NextEra EnergyÃÂ (NYSE:) is now the largest electric utility in the U.S. by market capitalization. That might actually be the only problem with NEE stock.
NextEra shares gained 34% year-to-date, and trades just off record highs. Potential valuation concerns aside, NextEra looks like a winner. It serves customers in the southern Florida region, still one of the nationâÂÂs fastest-growing areas.
A 35ÃÂ P/E multiple is high for the space but not outlandishly so. And a 2.04% dividend yield provides income along the way.
Investors looking for value in the space might look for a smaller play like cheaper Dominion Energyà(NYSE:). But itâÂÂs usually worth paying for quality, and NextEra Energy looks like one of the best utility stocks out there.
McCormick & Company (MKC)
Source: Shutterstock
Dividend Yield: 1.51%
McCormick & CompanyÃÂ (NYSE:) is another quality company whose valuation might spook some investors. But MKC stock very rarely is offered cheaply.
The companyâÂÂs market leadership in spices and seasonings provides both an impressive moat and protection against economic downturns. MKC stock did dip after the company àsauce from Reckitt Benckiserà(OTCMKTS:) at a price that looked a bit high to many investors. But MKC has recovered those gains and then some.
Top-line growth for McCormick likely isnâÂÂt going to be explosive, but it will be steady. The same has been true of MKC stock, which has returned an average of 13% a year over the past decade, including dividends.
With continuous cost-cutting initiatives, the contribution from the acquired brands and organic growth (and growth in organic products), MKC still should be able to provide double-digit annual returns going forward as well.
AllstateÃÂ (ALL)
Source: Shutterstock
Dividend Yield: 1.61%
Allstate Corp (NYSE:) long has used the tagline, âÂÂYouâÂÂre in good hands,â and itâÂÂs true for Allstate investors as well.
ALL stock has almost quadrupled from late-2011 lows. And there could be more upside to come. After all, Allstate isnâÂÂt particularly expensive, trading at a 14àP/E.
Once any short-term worries subside, ALL should resume its march upward.
International Flavors & Fragrances (IFF)
Source: Shutterstock
Dividend Yield: 2.23%
International Flavors & Fragrancesà(NYSE:) is a company most consumers encounter every day without knowing it and many investors arenâÂÂt exactly hip to it, either.
As its name suggests, the company develops flavors & fragrances across 13 categories, including cosmetics, perfumes, beverages and sweet flavors. Sales and earnings have increased consistently and so has IFFâÂÂs share price. At a 20.75 P/E, IFF does look a bit pricey. But, as with McCormick and other stocks on this list, investors should pay for quality.
IFFâÂÂs hidden, but key role, in so many industries, gives it a great deal of protection against both competition and macro factors. Acquisitions and a growing cosmetic additive business both provide room for growth.
Consumers may notÃÂ know IFF, but investors should.
Lamb Weston (LW)
Source: Shutterstock
Dividend Yield: 0.98%
Lamb Westonà(NYSE:) was spun off from Conagra Brandsà(NYSE:) last year. Lamb Weston is the No. 1 potato producer in the United States. In fact, it manufactures the well-known fries at McDonaldâÂÂsà(NYSE:), among other restaurant chains.
Lamb Weston also has a consumer business (including a small segment that manufactures frozen vegetables), while serving restaurants of all sizes. Health concerns might seem a long-term headwind against the business, but growth has been steady for years, and margins continue to improve.
LW is targeting international markets for growth, as French fries have much more limited penetration, while international audiences generally are intrigued by Americanized products.
Despite growth and leading market share, LW stock isnâÂÂt particularly cheap, trading at about 23 times next yearâÂÂs earnings. The company did pick up a fair amount of debt in the CAG spinoff. But itâÂÂs paying that debt down, which should lower interest expense and boost cash flow going forward.
With many similar stocks trading at much higher multiples, LW seems to have room for upside. And international growth should offset any health-related concerns in the U.S., should they arise. AmericaâÂÂs love affair with French fries isnâÂÂt going to suddenly end, and that should ensure years of stability for Lamb Weston at least.
Fortune Brands (FBHS)
Source: Shutterstock
Dividend Yield: 1.33%
Investors are commonly advised to diversify their portfolio. Fortune Brands Home & SecurityÃÂ (NYSE:) has done just that.
The company operates in four segments: Cabinets, Plumbing, Doors, and Security. Among its well-known brands are Moen in plumbing, and MasterLock in security.
FBHS is more of a cyclical stock than most on this list, and the company no doubt has benefited from the steady if slow, housing recovery in the U.S.
But the companyâÂÂs products also generate relatively stable replacement demand, and a 1.33% dividend yield provides modest, but growing, income.
Fortune Brands has been an impressive company since its founding and a solid stock since its 2011 IPO. Thereàmay be a bit more volatility here, but thatâÂÂs a worthwhile price to pay for long-term investors. ThereâÂÂs enough value in Fortune Brands to ride out any market jitters.
Republic Services (RSG)
Source: Shutterstock
Dividend Yield:ÃÂ 1.62%
Republic Servicesà(NYSE:) is a bit smaller and likely a lot less well-known than rival Waste Managementà(NYSE:). But in this case, thatâÂÂs not necessarily a bad thing.
Republic Services has outgrown its larger competitor in both sales and earnings over the past five years. RSG stock has modestly outperformed WM over the same period as well. Investors appear to believe that will continue, as Republic Services is valued a bit higher than Waste Management, at least based on forward-earnings multiples.
Both RSG and WM are solid long-term plays.àContracted revenue and steady demand should support both companies for years to come. ThereâÂÂs room for further acquisitions in a relatively fragmented space. Republic Services gets the nod here due to slightly better growth and more room for margin improvement.
But investors looking for safe, stable growthàcanâÂÂt go wrong with either RSG or WM.
As of this writing, Vince Martin was long MKC.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (DEO) Dividend Yield: 3.01% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. During that crisis, BofA acquisition Countrywide Financial blew up in spectacular fashion, after pioneering many of the risky tactics that led to the bubble and subsequent bust.
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Diageo (DEO) Dividend Yield: 3.01% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. NextEra Energy (NEE) Source: Shutterstock Dividend Yield: 2.04% Utility stocks are among the most common safe, buy-and-hold stocks.
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Diageo (DEO) Dividend Yield: 3.01% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. NextEra Energy (NEE) Source: Shutterstock Dividend Yield: 2.04% Utility stocks are among the most common safe, buy-and-hold stocks.
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Diageo (DEO) Dividend Yield: 3.01% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. NextEra Energy (NEE) Source: Shutterstock Dividend Yield: 2.04% Utility stocks are among the most common safe, buy-and-hold stocks.
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3a82c86f-6358-4583-b23c-66cb1776aa2a
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727736.0
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2020-02-19 00:00:00 UTC
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7 Super Stable Dividend Stocks to Buy Now
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DEO
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https://www.nasdaq.com/articles/7-super-stable-dividend-stocks-to-buy-now-2020-02-19
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nan
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nan
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[Correction: This article was updated on Feb. 21, 2020, to correct the dividend yield for Walmart.]
The stock market has been amazingly resilient in recent weeks. Despite the rise of the new coronavirus from China, along with shifting political winds in the United States, the major indexes have managed to reach fresh new highs. Tech stocks in particular have led the charge higher with a strong round of earnings.
That leaves investors in a bit of an uncomfortable position. The stock market, as measured by the S&P 500, is up 15% just since October. Some sectors of the economy, like software-as-a-service stocks, are up much more than that. However, given the mounting risks to the market, these gains could be fleeting.
One way to deal with this uncertainty is to move into safer dividend stocks. This way, you still have exposure to the stock market in case the rally continues in coming weeks and months. On the other hand, if the market takes a tumble, these defensive names should fall much less than the overall market. Regardless of whatever may come, theyâÂÂll kick out a steady income stream that helps buffer your portfolio from market volatility.
Walmart (WMT)
Source: Jonathan Weiss / Shutterstock.com
Dividend Yield: 1.9%
If youâÂÂre thinking of super safe dividend stocks, your mind may start out with the Dividend Aristocrats. These are in fact true royalty â the select few companies that have managed to increase their dividends annually for at least 25 years in a row. At present, there are around 55 American firms that qualify.
Of these, only two â yes, two â managed to generate a between October 2007, when the stock market peaked, and the March 2009 Financial Crisis bottom.àWalmart (NYSE:) was the winner of the bunch, with its stock actually going up 7% over that span. Needless to say, generating a positive return during a time when the stock market plunges 50% is a most remarkable feat.
Making it doubly-impressive, chief Walmart rivalàTarget (NYSE:) plummeted 61% over the same span. WalmartâÂÂs unique blend of lowest-cost supply chain and unrivaled focus on customer value delivered the goods during the economic downturn. Recently, investors have focused more on WalmartâÂÂs possibilities in the e-commerce space. But donâÂÂt forget that when it comes to delivering value, Walmart is still the proven king of retail during recessions.
Colgate (CL)
Source: Isabelle OHara/Shutterstock.com
Dividend Yield: 2.27%
Colgate (NYSE:) was another of the best-performing Dividend Aristocrats during the Financial Crisis. It didnâÂÂt eek out a positive return over the stretch, but it only fell 20%. ThatâÂÂs exactly the sort of thing you want from super safe dividend stocks.
What makes Colgate so safe? To put it simply, the company has a ridiculously strong moat. It sells more than 40% of the worldâÂÂs toothpaste and a third of its manual toothbrushes. Go to nearly every corner of the world, and youâÂÂll find Colgate products. ItâÂÂs one of the worldâÂÂs most omnipresent American brands. Combine that with a market that never changes â people need to clean their teeth regardless of what else happens in the world â and you have unmatched safety.
Colgate stock used to be quite expensive. But after five years of the share price going nowhere, Colgate is more reasonably-valued now. It pays an almost 2.3% dividend, and could offer surprisingly high growth in coming years as emerging markets pick up steam. It also has made a play in the more competitive though higher-growth pet food market, and success there could energize the stock. Even if that fails, however, the core toothpaste market will continue carrying the stock through any storms that may come.
Pepsico (PEP)
Source: FotograFFF / Shutterstock.com
Dividend Yield: 2.62%
Pepsico (NYSE:) may not look like the cheapest dividend stock out there on first glance. Yes, it is selling for more than 25x earnings. And yes, it is also selling near its all-time high price. From a short-term trading perspective, this probably isnâÂÂt the best moment to get into Pepsico stock.
For longer-term investors, however, thereâÂÂs still a lot to like. The companyâÂÂs snack food division has given it more resilience and growth than its arch-rival beverages company. Additionally, due to its heavy exposure to emerging markets, Pepsi has seen a major currency headwind in recent years. With the U.S. dollar near 20-year highs, this drag is likely to reverse at some point, leading to a significant earnings boost.
Then thereâÂÂs the dividend yield, which currently registers at 2.62%. ThatâÂÂs quite nice because Pepsico has yielded between 2.5% and 3.2% for virtually all of the past decade. This means that while PepsicoâÂÂs stock price has appreciated dramatically, it is actually backed up by the rise in its earnings and dividends over the past 10 years. ThatâÂÂs definitely not the case for many other defensive slower-growing companies.
If you can get Pepsico on a pullback, all the better. But even at this price, itâÂÂs not a bad choice for investors seeking safe dividends.
Diageo (DEO)
Source: Shutterstock
Dividend Yield: 3%
Moving to harder beverages, we have international spirits leaderàDiageo (NYSE:). The maker of Johnnie Walker, Crown Royal, Smirnoff, and Guinness, among other brands, has gone back on sale. DiageoâÂÂs stock price has slipped around 7% in recent weeks following the outbreak of the coronavirus from China.
This makes some sense; Diageo has built an increasing portion of its business in recent years selling to wealthy customers in leading Asian markets. Sales in places such as Hong Kong have plummeted due to the virus.
As is always the case for the alcohol industry, however, setbacks tend to not last long. Liquor consumption is not closely linked to the economy or political developments, thus making these the safest sorts of dividend stocks.
Diageo has a track record of raising its dividend every year so far this century (as measured in its home currency of British pounds) making it a reliable choice for steadily increasing income. While Diageo may suffer a bad quarter or two thanks to the virus-driven sales slowdown, this will be a non-event in due time for the companyâÂÂs loyal shareholders.
Enbridge (ENB)
Source: Shutterstock
Dividend Yield: 5.8%
Some investors have given up on oil stocks given the carnage in recent years. And thatâÂÂs an understandable reaction. Truth be told, there are still super safe dividend stocks in the sector, namely in the pipeline space.
For example, look atÃÂ Enbridge (NYSE:). The stock is actually up almost 17% over the past year, and 24.5% over the past six months despite a generally brutal market for energy. How has it managed this? Enbridge and other Canadian energy giants have faced a longer downturn in their market conditions already than their U.S. peers have. This has led to more capital discipline, thus these firms have already started to turn the corner.
This improved capital position is leading to another great thing for income investors: dividend increases. In fact, this past week, a 10% dividend hike. That is, by the way, its third year in a row of double-digit dividend hikes despite the hard times for the energy industry in general.
Take one of the best companies in the industry, and then combine it with an upturn in the long-beleaguered oil and gas markets, and Enbridge stock could deliver strong upside in addition to its fat yield.
Unilever (UL)
Source: JHVEPhoto/Shutterstock.com
Dividend Yield: 3%
Unilever (NYSE:) is one of the worldâÂÂs largest consumer products companies. Selling everything from energy drinks to ice cream, soap, cleaning supplies, and more, the company almost undoubtedly has some products in your pantry or laundry room.
Companies like Unilever are known for their rock solid dividend records. In fact, 2020 should mark the companyâÂÂs 4oth consecutive year of increasing its dividend. With a starting yield at 3%, thatâÂÂs a generous offer in todayâÂÂs market.
Sure, some folks will complain that Unilever hasnâÂÂt shown a lot of growth in recent years. And thatâÂÂs a fair criticism. At 25x earnings, Unilever stock doesnâÂÂt look particularly cheap, either. If youâÂÂre just here for one of the safest blue chip dividends around, however, itâÂÂs hard to go wrong with Unilever.
Compared to a Certificate of Deposit or government bond, UnileverâÂÂs 3% dividend with annual increases to that figure makes for a compelling alternative.
PeopleâÂÂs United Financial (PBCT)
Source: Shutterstock
Dividend Yield: 4.4%
Remember how I said there were only two Dividend Aristocrats that made it through the Great Financial Crisis with a positive total return? The well-known one is Walmart, of course. But a plucky Connecticut bank,àPeopleâÂÂs United Financial (NASDAQ:), made it as well. PBCT stock managed a 2% positive return during that brutal span from late 2007 to the March 2009 low.
This is doubly amazing because PeopleâÂÂs United is a bank, after all. Almost all the big banks were in desperate straits, if not outright bust at that point. But PeopleâÂÂs United proved its mettle as a super stable dividend company during the crisis. Its banking market is the northeast, particularly in wealthy New York City and Boston suburbs. As a result, its well-off customers fared relatively well despite the crisis. And its lending book, largely vanilla home mortgages, was built to withstand a downturn.
People have the perception that banks are dangerous black boxes. ThatâÂÂs true of many too-big-to-fail banks. However, for PeopleâÂÂs United, a crisis is actually an opportunity because they remain solvent and can absorb more business from their struggling peers.
In any case, they kept their now-27 year annual dividend hike streak alive during 2008 and 2009. PBCT stock now yields 4.4% and comes with an annual, if modest, increase. The knock on the bank now is that it is too conservative and doesnâÂÂt grow quickly enough. But as 2008 proved, that âÂÂweaknessâ is in fact the bankâÂÂs true strength.
Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek. At the time of this writing, he owned ENB, PBCT, UL, and DEO stock.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (DEO) Source: Shutterstock Dividend Yield: 3% Moving to harder beverages, we have international spirits leaderÃÂ Diageo (NYSE:). At the time of this writing, he owned ENB, PBCT, UL, and DEO stock. This makes some sense; Diageo has built an increasing portion of its business in recent years selling to wealthy customers in leading Asian markets.
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Diageo (DEO) Source: Shutterstock Dividend Yield: 3% Moving to harder beverages, we have international spirits leaderàDiageo (NYSE:). At the time of this writing, he owned ENB, PBCT, UL, and DEO stock. Unilever (UL) Source: JHVEPhoto/Shutterstock.com Dividend Yield: 3% Unilever (NYSE:) is one of the worldâÂÂs largest consumer products companies.
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Diageo (DEO) Source: Shutterstock Dividend Yield: 3% Moving to harder beverages, we have international spirits leaderàDiageo (NYSE:). At the time of this writing, he owned ENB, PBCT, UL, and DEO stock. Walmart (WMT) Source: Jonathan Weiss / Shutterstock.com Dividend Yield: 1.9% If youâÂÂre thinking of super safe dividend stocks, your mind may start out with the Dividend Aristocrats.
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Diageo (DEO) Source: Shutterstock Dividend Yield: 3% Moving to harder beverages, we have international spirits leaderàDiageo (NYSE:). At the time of this writing, he owned ENB, PBCT, UL, and DEO stock. But even at this price, itâÂÂs not a bad choice for investors seeking safe dividends.
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727737.0
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2020-02-12 00:00:00 UTC
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Anheuser-Busch InBev’s Stock Lost >23% Value In Last 6 Months; What Is The Stock Actually Worth?
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https://www.nasdaq.com/articles/anheuser-busch-inbevs-stock-lost-23-value-in-last-6-months-what-is-the-stock-actually
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nan
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Anheuser-Busch InBev (NYSE: BUD) has seen its stock price drop by over 23% over the last 6 months, to $74.80 as of February 7, 2020. A major part of the drop began post the announcement of the company’s Q3 2019 results, which saw a major drop in beer volume sold in China. Subsequently, the consensus for the company’s top line has been lowered for the full 2019 as well as 2020. However, the company’s margins are expected to rise due to its successful deleveraging program and SABMiller synergy benefits. Improving profitability is likely to support growth in the company’s stock price, with revenue also expected to see an uptick 2020 onward. Trefis has a price estimate of $97 per share for Anheuser-Busch InBev’s stock, which
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Anheuser-Busch InBev (NYSE: BUD) has seen its stock price drop by over 23% over the last 6 months, to $74.80 as of February 7, 2020. However, the company’s margins are expected to rise due to its successful deleveraging program and SABMiller synergy benefits. Improving profitability is likely to support growth in the company’s stock price, with revenue also expected to see an uptick 2020 onward.
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Anheuser-Busch InBev (NYSE: BUD) has seen its stock price drop by over 23% over the last 6 months, to $74.80 as of February 7, 2020. A major part of the drop began post the announcement of the company’s Q3 2019 results, which saw a major drop in beer volume sold in China. Trefis has a price estimate of $97 per share for Anheuser-Busch InBev’s stock, which
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Anheuser-Busch InBev (NYSE: BUD) has seen its stock price drop by over 23% over the last 6 months, to $74.80 as of February 7, 2020. A major part of the drop began post the announcement of the company’s Q3 2019 results, which saw a major drop in beer volume sold in China. Improving profitability is likely to support growth in the company’s stock price, with revenue also expected to see an uptick 2020 onward.
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Anheuser-Busch InBev (NYSE: BUD) has seen its stock price drop by over 23% over the last 6 months, to $74.80 as of February 7, 2020. A major part of the drop began post the announcement of the company’s Q3 2019 results, which saw a major drop in beer volume sold in China. Subsequently, the consensus for the company’s top line has been lowered for the full 2019 as well as 2020.
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80add906-9127-4e23-87cb-42ae392a14c9
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727738.0
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2020-01-31 00:00:00 UTC
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First Week of February 21st Options Trading For Diageo (DEO)
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DEO
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https://www.nasdaq.com/articles/first-week-of-february-21st-options-trading-for-diageo-deo-2020-01-31
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nan
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nan
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Investors in Diageo plc (Symbol: DEO) saw new options become available this week, for the February 21st expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the DEO options chain for the new February 21st contracts and identified one put and one call contract of particular interest.
The put contract at the $150.00 strike price has a current bid of 40 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $150.00, but will also collect the premium, putting the cost basis of the shares at $149.60 (before broker commissions). To an investor already interested in purchasing shares of DEO, that could represent an attractive alternative to paying $158.44/share today.
Because the $150.00 strike represents an approximate 5% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 93%. Stock Options Channel will track those odds over time to see ho
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Investors in Diageo plc (Symbol: DEO) saw new options become available this week, for the February 21st expiration. To an investor already interested in purchasing shares of DEO, that could represent an attractive alternative to paying $158.44/share today. At Stock Options Channel, our YieldBoost formula has looked up and down the DEO options chain for the new February 21st contracts and identified one put and one call contract of particular interest.
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At Stock Options Channel, our YieldBoost formula has looked up and down the DEO options chain for the new February 21st contracts and identified one put and one call contract of particular interest. To an investor already interested in purchasing shares of DEO, that could represent an attractive alternative to paying $158.44/share today. Investors in Diageo plc (Symbol: DEO) saw new options become available this week, for the February 21st expiration.
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At Stock Options Channel, our YieldBoost formula has looked up and down the DEO options chain for the new February 21st contracts and identified one put and one call contract of particular interest. Investors in Diageo plc (Symbol: DEO) saw new options become available this week, for the February 21st expiration. To an investor already interested in purchasing shares of DEO, that could represent an attractive alternative to paying $158.44/share today.
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At Stock Options Channel, our YieldBoost formula has looked up and down the DEO options chain for the new February 21st contracts and identified one put and one call contract of particular interest. Investors in Diageo plc (Symbol: DEO) saw new options become available this week, for the February 21st expiration. To an investor already interested in purchasing shares of DEO, that could represent an attractive alternative to paying $158.44/share today.
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00ee71b3-30d3-4d82-a669-9664aaa357b3
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727739.0
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2020-01-30 00:00:00 UTC
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Diageo H1 Profit Down, Net Sales Rise; Cuts FY Sales Growth View - Quick Facts
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DEO
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https://www.nasdaq.com/articles/diageo-h1-profit-down-net-sales-rise-cuts-fy-sales-growth-view-quick-facts-2020-01-30
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nan
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nan
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) reported Thursday that first-half profit attributable to parent company's shareholders dropped 6 percent to 1.87 billion pounds from last year's 1.98 billion pounds.
Basic earnings per share were 79.2 pence, down 2.1 percent from last year. Adjusted earnings per share were 80.2 pence, compared to 77 pence a year ago.
Reported operating profit of 2.4 billion pounds increased 0.5 percent, driven by organic growth.
Net sales increased 4.2 percent to 7.2 billion pounds from 6.91 billion pounds a year ago. Further, the company announced that interim dividend increased 5 percent to 27.41 pence per share.
Looking ahead for the full year, the company now expects organic net sales growth to be towards the lower end of 4 percent to 6 percent mid-term guidance range.
The company previously expected fiscal 2020 organic net sales growth to be toward the mid-point of the 4 percent to 6 percent range.
The company continues to expect organic operating profit to grow roughly one percentage point ahead of organic net sales.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) reported Thursday that first-half profit attributable to parent company's shareholders dropped 6 percent to 1.87 billion pounds from last year's 1.98 billion pounds. Reported operating profit of 2.4 billion pounds increased 0.5 percent, driven by organic growth. Further, the company announced that interim dividend increased 5 percent to 27.41 pence per share.
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) reported Thursday that first-half profit attributable to parent company's shareholders dropped 6 percent to 1.87 billion pounds from last year's 1.98 billion pounds. Reported operating profit of 2.4 billion pounds increased 0.5 percent, driven by organic growth. Net sales increased 4.2 percent to 7.2 billion pounds from 6.91 billion pounds a year ago.
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) reported Thursday that first-half profit attributable to parent company's shareholders dropped 6 percent to 1.87 billion pounds from last year's 1.98 billion pounds. Net sales increased 4.2 percent to 7.2 billion pounds from 6.91 billion pounds a year ago. Looking ahead for the full year, the company now expects organic net sales growth to be towards the lower end of 4 percent to 6 percent mid-term guidance range.
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(RTTNews) - British alcoholic beverages company Diageo plc (DGE.L, DEO) reported Thursday that first-half profit attributable to parent company's shareholders dropped 6 percent to 1.87 billion pounds from last year's 1.98 billion pounds. Adjusted earnings per share were 80.2 pence, compared to 77 pence a year ago. Reported operating profit of 2.4 billion pounds increased 0.5 percent, driven by organic growth.
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80dbffe0-0b64-4ac4-8202-7de3d49833a8
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727740.0
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2020-01-15 00:00:00 UTC
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Forget China, There's Still a Big Trade Battle in Europe
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DEO
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https://www.nasdaq.com/articles/forget-china-theres-still-a-big-trade-battle-in-europe-2020-01-15
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nan
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nan
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Detente on trade relations between the U.S. and China continues to progress, with President Trump removing China from the list of currency manipulators. While China is obviously a strategic trading partner, and settling points of contention is crucial, the U.S. is apparently still fully engaged in a hot trade war with Europe.
After the U.S. imposed a 25% tariff on French, German, British, and Spanish wines last October, France is considering imposing a tax on U.S. tech giants like Facebook and Alphabet's Google, Trump's trade representative has proposed hiking the duties on all European wines and whiskies to 100% and then extending it to other imported goods like olives, cheese, handbags, and cookware.
The massive increase would cause prices to soar and would hit not only importers, but restaurants and retailers also. And, of course, it will be the consumer who actually pays the cost.
There won't be much to celebrate if the next round of tariffs on European wine goes through. Image source: Getty Images.
Falling dominoes
No one ever really wins in a trade war, consumers least of all, and the latest skirmish shows once again how these kinds of spats always ensnare industries and businesses completely unrelated to the original squabble.
Tariffs on European aluminum and steel, for example, resulted in retaliatory tariffs against Harley-Davidson motorcycles and Brown-Forman's Jack Daniels whiskey. U.S. producers of aluminum and steel used the opportunity to raise their own prices rather than continue supplying the goods at a discount.
The seeds for the current escalating tensions were planted after the World Trade Organization ruled that Airbus improperly received subsidies and therefore authorized the U.S. to impose $7.5 billion worth of tariffs on imported European goods. The U.S. imposed duties of 10% on civilian aircraft and 25% on wine and other agricultural products.
While Trump has used tariffs to bring China, Mexico, and Canada to the negotiating table and hammer out new trade agreements, they have created tumult and higher prices in the process. The U.S. and Europe have not seen such progress, and the tensions are growing.
The grapes of wrath
Small and independent wine importers would undoubtedly be hit hardest, though even some of the biggest would feel the impact. Although Diageo (NYSE: DEO) produces almost all of its wine outside of Europe, it is the world's largest producer of Scotch whisky, which accounts for 25% of total revenue, and its Johnnie Walker brand is the top seller all around the globe. Similarly, Pernod Ricard's (OTC: PDRDY) Jameson is the leading brand of Irish whiskey, and would also be subject to the new tariffs.
On the other hand, U.S. wine and spirits producer Constellation Brands (NYSE: STZ) would likely benefit from the protection it received from the tariffs. Its portfolio of wines, which includes brands such as Meiomi, Robert Mondavi, and Ruffino, accounts for 27% of total revenue, but it has made a pointed effort to go after the premium and super premium market.
It recently agreed to sell off a number of low-end brands to Gallo, and even at the elevated price point its remaining wines would sell at, the tariff hike could price the competition out of the market.
The high cost of eating
Upscale restaurants similarly come under pressure. Ruth's Hospitality Group (NASDAQ: RUTH), the owner of the high-end eatery Ruth's Chris Steak House, obviously derives most of its revenue from food and beverage sales, and though it doesn't break out wine sales, it does highlight its world-class wine list as a selling point and notes that some bottles come with a tab of $1,000 or more.
No doubt people paying a grand for a bottle of wine won't be bothered much if they have to pay up a little more for it because of tariffs, but the trade war could also hurt mid-tier chains like Darden Restaurants (NYSE: DRI) since its Olive Garden counts on a broad selection of Italian wines.
Its own upscale chain, Capital Grille, boasts a list of over 350 different wines, and it notes that alcoholic beverages, primarily wine, represent over 29% of the average $83-per-person check at the chain.
The impact would also spread out into other segments of the economy. Even retailers like Walmart would feel the effects, though it would admittedly be a far smaller pain point. Recently the retail giant began adding premium alcoholic beverages to its shelves, and though there would be a large number of domestic beverages in the mix, including craft beer, spirits, and canned wine, adding the Champagne Veuve Clicquot was a point of distinction for Walmart.
The last battlefront
Although there might be a few winners from the trade war, many others will be harmed, some irreparably so. And while most people are focused on the U.S. settling its differences with China, the battle with Europe continues to rage, and we may see further fallout.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool recommends Constellation Brands and Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Although Diageo (NYSE: DEO) produces almost all of its wine outside of Europe, it is the world's largest producer of Scotch whisky, which accounts for 25% of total revenue, and its Johnnie Walker brand is the top seller all around the globe. Falling dominoes No one ever really wins in a trade war, consumers least of all, and the latest skirmish shows once again how these kinds of spats always ensnare industries and businesses completely unrelated to the original squabble. The seeds for the current escalating tensions were planted after the World Trade Organization ruled that Airbus improperly received subsidies and therefore authorized the U.S. to impose $7.5 billion worth of tariffs on imported European goods.
|
Although Diageo (NYSE: DEO) produces almost all of its wine outside of Europe, it is the world's largest producer of Scotch whisky, which accounts for 25% of total revenue, and its Johnnie Walker brand is the top seller all around the globe. After the U.S. imposed a 25% tariff on French, German, British, and Spanish wines last October, France is considering imposing a tax on U.S. tech giants like Facebook and Alphabet's Google, Trump's trade representative has proposed hiking the duties on all European wines and whiskies to 100% and then extending it to other imported goods like olives, cheese, handbags, and cookware. Recently the retail giant began adding premium alcoholic beverages to its shelves, and though there would be a large number of domestic beverages in the mix, including craft beer, spirits, and canned wine, adding the Champagne Veuve Clicquot was a point of distinction for Walmart.
|
Although Diageo (NYSE: DEO) produces almost all of its wine outside of Europe, it is the world's largest producer of Scotch whisky, which accounts for 25% of total revenue, and its Johnnie Walker brand is the top seller all around the globe. After the U.S. imposed a 25% tariff on French, German, British, and Spanish wines last October, France is considering imposing a tax on U.S. tech giants like Facebook and Alphabet's Google, Trump's trade representative has proposed hiking the duties on all European wines and whiskies to 100% and then extending it to other imported goods like olives, cheese, handbags, and cookware. Ruth's Hospitality Group (NASDAQ: RUTH), the owner of the high-end eatery Ruth's Chris Steak House, obviously derives most of its revenue from food and beverage sales, and though it doesn't break out wine sales, it does highlight its world-class wine list as a selling point and notes that some bottles come with a tab of $1,000 or more.
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Although Diageo (NYSE: DEO) produces almost all of its wine outside of Europe, it is the world's largest producer of Scotch whisky, which accounts for 25% of total revenue, and its Johnnie Walker brand is the top seller all around the globe. Detente on trade relations between the U.S. and China continues to progress, with President Trump removing China from the list of currency manipulators. Recently the retail giant began adding premium alcoholic beverages to its shelves, and though there would be a large number of domestic beverages in the mix, including craft beer, spirits, and canned wine, adding the Champagne Veuve Clicquot was a point of distinction for Walmart.
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f0a26187-d207-4eac-b50d-065429520c05
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727741.0
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2020-01-09 00:00:00 UTC
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How Important Is Asia-Pacific For Diageo’s Growth?
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DEO
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https://www.nasdaq.com/articles/how-important-is-asia-pacific-for-diageos-growth-2020-01-10
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nan
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nan
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Asia-Pacific (APAC) is expected to be the fastest growing segment for Diageo (NYSE: DEO) in the near term. Diageo’s revenues (shows Diageo’s key revenue components) have increased from $15.4 billion in FY 2016 to $16.6 billion in FY 2019, adding about $1.2 billion in three years. During the same period, the APAC segment added $0.4 billion in revenue, accounting for 35% of the increase, whereas the other four divisions (North America, Europe, Africa, and Latin America) together made up the other 65%.
View our interactive dashboard – What Is The Importance Of Asia-Pacific In Diageo’s Business? – to understand APAC’s volume, revenue, and profitability trends and its importance to the company as a whole.
Division Overview
What Is On Offer?
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Asia-Pacific (APAC) is expected to be the fastest growing segment for Diageo (NYSE: DEO) in the near term. View our interactive dashboard – What Is The Importance Of Asia-Pacific In Diageo’s Business? – to understand APAC’s volume, revenue, and profitability trends and its importance to the company as a whole.
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Asia-Pacific (APAC) is expected to be the fastest growing segment for Diageo (NYSE: DEO) in the near term. Diageo’s revenues (shows Diageo’s key revenue components) have increased from $15.4 billion in FY 2016 to $16.6 billion in FY 2019, adding about $1.2 billion in three years. During the same period, the APAC segment added $0.4 billion in revenue, accounting for 35% of the increase, whereas the other four divisions (North America, Europe, Africa, and Latin America) together made up the other 65%.
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Asia-Pacific (APAC) is expected to be the fastest growing segment for Diageo (NYSE: DEO) in the near term. Diageo’s revenues (shows Diageo’s key revenue components) have increased from $15.4 billion in FY 2016 to $16.6 billion in FY 2019, adding about $1.2 billion in three years. During the same period, the APAC segment added $0.4 billion in revenue, accounting for 35% of the increase, whereas the other four divisions (North America, Europe, Africa, and Latin America) together made up the other 65%.
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Asia-Pacific (APAC) is expected to be the fastest growing segment for Diageo (NYSE: DEO) in the near term. Diageo’s revenues (shows Diageo’s key revenue components) have increased from $15.4 billion in FY 2016 to $16.6 billion in FY 2019, adding about $1.2 billion in three years. During the same period, the APAC segment added $0.4 billion in revenue, accounting for 35% of the increase, whereas the other four divisions (North America, Europe, Africa, and Latin America) together made up the other 65%.
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4adc0717-7625-4848-8f31-c5e6bd292222
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727742.0
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2020-01-08 00:00:00 UTC
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Anheuser-Busch InBev Sees Sharpest Volume Decline In China. What Does This Mean For The Beer Giant?
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DEO
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https://www.nasdaq.com/articles/anheuser-busch-inbev-sees-sharpest-volume-decline-in-china.-what-does-this-mean-for-the
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nan
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nan
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Anheuser-Busch InBev (NYSE: BUD) sells different beers, belonging to the (a) premium/high end brands, (b) core brands, and (c) value, discount, or sub-premium brands, in China. For example, the global brand Stella Artois targets the premium category, while the local brand Harbin targets the core category in China.
What Happened?
Volume sales in China saw their biggest quarterly fall in Q3 2019, when beer volume sold decreased by 5.9% compared to Q3 2018.
Volume has increased in 6 of the last 8 quarters, with the fall being marginal (1.1%) in Q1 2019, mainly due to the timing of the Chinese New Year.
However, the 5.9% decline in Q3 2019 is Anheuser-Busch InBev’s largest decline in China, the market which the company is most bullish about.
To understand the trend in volume over recent quarters along with what drove this decline in Q3, refer to the Trefis interactive dashboard – Anheuser-Busch InBev’s Volume: Why Has Beer Volume Decreased In China And What Does This Mean For Anheuser-Busch InBev?
Why?
One of the main factors that led to the decline in volume sold is a continuous slowing down of the Chinese economy, with the GDP growth having touched a 27-year low of 6% in Q3 2019.
Along with lower growth and consumer spending, new rules in China that prohibit sales of alcoholic drinks after 2 a.m. have dragged the industry down.
Additionally, shipment phasing, under which the company brought forward some of its volume sales to an earlier quarter due to marketing campaigns and listing of its Asia-Pacific business in Hong Kong, also led to a decline in volume during Q3 2019.
So What?
The sharp decline of 5.9% in volume during the quarter is likely to affect the full-year revenue growth in Asia-Pacific (APAC) in 2019.
Though APAC revenue is expected to increase in 2019, the rate of growth (3%) would be much lower compared to the previous 2 years (7.6% in 2017 and 8.5% in 2018).
Increasing premiumization and strong overall performance of the company’s e-commerce business is expected to drive APAC growth over the next two years.
Segment revenue could increase from $8.5 billion in 2018 to $9 billion in 2020, adding $0.5 billion in the next two years, which would be much lower than the $1.2 billion added in revenues in the previous two years (2016-2018).
For a company that is betting big on the Chinese region, a sharp drop in volume is likely to be a concern, but consumers switching to premium brands (higher revenue per unit) is expected to offset this decline in volume.
To understand how other operating divisions of the company are performing, refer to the Trefis analysis- Anheuser-Busch InBev Revenues: How Does Anheuser-Busch InBev Make Money?
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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One of the main factors that led to the decline in volume sold is a continuous slowing down of the Chinese economy, with the GDP growth having touched a 27-year low of 6% in Q3 2019. Along with lower growth and consumer spending, new rules in China that prohibit sales of alcoholic drinks after 2 a.m. have dragged the industry down. Increasing premiumization and strong overall performance of the company’s e-commerce business is expected to drive APAC growth over the next two years.
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Volume sales in China saw their biggest quarterly fall in Q3 2019, when beer volume sold decreased by 5.9% compared to Q3 2018. To understand the trend in volume over recent quarters along with what drove this decline in Q3, refer to the Trefis interactive dashboard – Anheuser-Busch InBev’s Volume: Why Has Beer Volume Decreased In China And What Does This Mean For Anheuser-Busch InBev? To understand how other operating divisions of the company are performing, refer to the Trefis analysis- Anheuser-Busch InBev Revenues: How Does Anheuser-Busch InBev Make Money?
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To understand the trend in volume over recent quarters along with what drove this decline in Q3, refer to the Trefis interactive dashboard – Anheuser-Busch InBev’s Volume: Why Has Beer Volume Decreased In China And What Does This Mean For Anheuser-Busch InBev? Additionally, shipment phasing, under which the company brought forward some of its volume sales to an earlier quarter due to marketing campaigns and listing of its Asia-Pacific business in Hong Kong, also led to a decline in volume during Q3 2019. For a company that is betting big on the Chinese region, a sharp drop in volume is likely to be a concern, but consumers switching to premium brands (higher revenue per unit) is expected to offset this decline in volume.
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Volume has increased in 6 of the last 8 quarters, with the fall being marginal (1.1%) in Q1 2019, mainly due to the timing of the Chinese New Year. To understand the trend in volume over recent quarters along with what drove this decline in Q3, refer to the Trefis interactive dashboard – Anheuser-Busch InBev’s Volume: Why Has Beer Volume Decreased In China And What Does This Mean For Anheuser-Busch InBev? Though APAC revenue is expected to increase in 2019, the rate of growth (3%) would be much lower compared to the previous 2 years (7.6% in 2017 and 8.5% in 2018).
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3582c497-3d88-4d10-9ae4-1b8fc62cd0a6
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727743.0
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2019-12-26 00:00:00 UTC
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Solid Dividend Investments in Alcohol Stocks
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DEO
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https://www.nasdaq.com/articles/solid-dividend-investments-in-alcohol-stocks-2019-12-26
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nan
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nan
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Alcoholic beverages might not be where most income investors turn to find dynamic dividend stocks, and after Anheuser-Busch InBev (NYSE: BUD) slashed its payout in half last year, you'd be forgiven for being wary of the space.
Yet the sector tends to offer investors consistent payouts, and a number of companies regularly increase their dividends, all the while exhibiting positive qualities in all kinds of economic conditions. It's a good reason why investors looking for steady, reliable income stocks should check out these three adult-beverage makers.
Image source: Getty Images.
Consistency to count on
A 1.1% dividend yield isn't exactly something to get too excited about, but Brown-Forman (NYSE: BF-A)(NYSE: BF-B) is one of those companies with a stellar record of increasing its payout annually for over 30 years.
Jack Daniel's Tennessee Whiskey remains the distiller's most important brand, accounting for the majority of total net sales. And it has been able to extend the brand's value by creating line extensions that have all proved extremely popular with drinkers, including honey, cinnamon, and (more recently) apple versions.
Brown-Forman has also benefited from the premiumization trend occurring across the alcohol space, with its high-end whiskeys and tequila enjoying double-digit growth in underlying net sales.
Now, it's true that drinker preferences change over time, and a decade ago whiskey was on the outs. But the evolution has also brought in more drinkers who are women, indicating that the strong sales Brown-Forman is experiencing can be expected to last for years to come.
Not all beer has been skunked
If there's one beverage that's been hurt the most by the health and wellness trend, it's beer. Volumes have fallen significantly, and even in the more-robust craft segment, it's been difficult to generate much growth.
But one segment that hasn't lost any of its resilience is Mexican beer, and Constellation Brands (NYSE: STZ) virtually owns the market with its Corona and Modelo family of beer. Its Modelo Especial generated the most growth for the entire U.S. beer category as depletions (or sales to distributors and retailers) grew 15% in the third quarter.
It was on the strength of its Mexican beer portfolio that Constellation initiated its current dividend policy in 2015, and it has raised the payout every year since.
Constellation was also the first major alcoholic beverage company to invest in the nascent marijuana industry, planting a $4 billion stake in Canopy Growth. That is currently a drag on the brewer's stock performance (as was its misguided $1 billion investment in craft brewer Ballast Point, which it recently agreed to sell), but Canopy is launching several lines of marijuana-based drinks in Canada that offer a new avenue for branching out.
Paying up for quality
Like Brown-Forman, Diageo (NYSE: DEO) has been riding the wave of premiumization to greater growth, led by its flagship Johnnie Walker scotch whiskey. It has positioned itself to be the leading global distiller of premium spirits, having sold off its portfolio of cheaper brands to concentrate on the high end.
Diageo is also spread across the full range of alcoholic beverages, with premium offerings in whiskey, rum, vodka, wine, and even beer. Of equal importance, its brands have been in leading positions for years, enduring drinking trends as they come and go, and suggesting they'll have staying power well into the future. Moreover, because they also command the No. 1 or No. 2 position in different markets around the globe, it gives the alcohol maker geographic diversity as well.
Diageo has been paying dividends since 1998, and has increased them annually since 2010, but it pays them semiannually, rather than quarterly.
And a bonus stock
Don't discount Anheuser-Busch! Although the megabrewer has suffered from falling U.S. volumes, it remains the king of beer globally, where volumes in most markets continue to rise. Total worldwide beer volume, even accounting for the steep decline in the U.S., is up 1% year to date, helped along by a developing portfolio of brands outside the beer segment.
Anheuser-Busch has proved remarkably agile for such a large corporation, responding to changing demands. As hard seltzer has come to dominate the market, the brewer will soon be introducing its third line to offer an option at every price point. And after initially swearing off investing in marijuana, it quickly reversed course and partnered up with Tilray to begin offering a lineup of cannabidiol-infused drinks in Canada. It says THC drinks are still off limits for the time being, but that could change rapidly, too.
The company is saddled with a lot of debt, which it is trying to pay down, though a plan to sell its Australian brewery operations just ran into some antitrust regulatory issues. Even so, Anheuser-Busch is still a global powerhouse, its Budweiser brand is world renown and continues to grow, and it is reaching further into emerging markets than any other brewer. Although it cut its dividend last year to help pay down that debt, it has not ruled out increases in the future.
10 stocks we like better than Anheuser-Busch InBev NV
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Rich Duprey has no position in any of the stocks mentioned. The Motley Fool recommends Anheuser-Busch InBev NV, Constellation Brands, and Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Paying up for quality Like Brown-Forman, Diageo (NYSE: DEO) has been riding the wave of premiumization to greater growth, led by its flagship Johnnie Walker scotch whiskey. Alcoholic beverages might not be where most income investors turn to find dynamic dividend stocks, and after Anheuser-Busch InBev (NYSE: BUD) slashed its payout in half last year, you'd be forgiven for being wary of the space. Yet the sector tends to offer investors consistent payouts, and a number of companies regularly increase their dividends, all the while exhibiting positive qualities in all kinds of economic conditions.
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Paying up for quality Like Brown-Forman, Diageo (NYSE: DEO) has been riding the wave of premiumization to greater growth, led by its flagship Johnnie Walker scotch whiskey. Jack Daniel's Tennessee Whiskey remains the distiller's most important brand, accounting for the majority of total net sales. That is currently a drag on the brewer's stock performance (as was its misguided $1 billion investment in craft brewer Ballast Point, which it recently agreed to sell), but Canopy is launching several lines of marijuana-based drinks in Canada that offer a new avenue for branching out.
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Paying up for quality Like Brown-Forman, Diageo (NYSE: DEO) has been riding the wave of premiumization to greater growth, led by its flagship Johnnie Walker scotch whiskey. Alcoholic beverages might not be where most income investors turn to find dynamic dividend stocks, and after Anheuser-Busch InBev (NYSE: BUD) slashed its payout in half last year, you'd be forgiven for being wary of the space. But one segment that hasn't lost any of its resilience is Mexican beer, and Constellation Brands (NYSE: STZ) virtually owns the market with its Corona and Modelo family of beer.
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Paying up for quality Like Brown-Forman, Diageo (NYSE: DEO) has been riding the wave of premiumization to greater growth, led by its flagship Johnnie Walker scotch whiskey. Total worldwide beer volume, even accounting for the steep decline in the U.S., is up 1% year to date, helped along by a developing portfolio of brands outside the beer segment. Although it cut its dividend last year to help pay down that debt, it has not ruled out increases in the future.
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727744.0
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2019-12-18 00:00:00 UTC
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How Much Does Anheuser-Busch InBev Spend On Cost Of Sales And Marketing?
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DEO
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https://www.nasdaq.com/articles/how-much-does-anheuser-busch-inbev-spend-on-cost-of-sales-and-marketing-2019-12-19
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nan
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Anheuser-Busch InBev’s (NYSE: BUD) expenses are largely driven by cost of sales (COS) and distribution, sales and marketing (DSM) cost. The two expense heads together account for about 62% of revenues as of 2018, reflecting a drop from 66% in 2016, primarily due to benefits from the SABMiller acquisition. This decline from 66% to 62% has added a little over $2 billion to the company’s profits, which translates into additional earnings of $1.06 per share in 2018. COS and DSM cost is further expected to drop to about 61% of revenues in 2019 and 2020, as volumes decline and a large part of revenue growth would be driven by premiumization. Over recent years, though total expenses have steadily increased, revenue has seen some fluctuation. This has led to volatility in total expenses as % of revenue, with the metric decreasing to 83.7% in 2017 before rising to 89.6% in 2018 on the back of lower revenues. To understand the trend in all major expense items and what is driving the change, view the Trefis interactive dashboard – How Does Anheuser-Busch InBev Spend Its Money?
Total Expenses
Anheuser-Busch’s total expenses as % of revenue decreased in 2017 before increasing to 89.6% in 2018 due to higher finance cost and increased tax outgo, along with the drop in revenues.
However, the metric is projected to decline in the near term led by higher revenues and the company’s focus on deleveraging
Breakdown Of Anheuser-Busch InBev’s Total Expenses
Cost of Sales
Cost of sales as % of revenue has steadily declined from 39.1% in 2016 to 37.3% in 2018.
Though cost of sales per hectoliter increased due to higher commodity prices, as a % of revenue it decreased due to lower volume sold and a sharper rise in revenue, which was led by increased prices and premiumization.
The metric is expected to decline further to ~36.8% by 2020, led by faster growth in revenue and continued synergy benefits from SABMiller.
Distribution, Sales and Marketing
Distribution, sales and marketing cost as % of revenue has been declining over recent years from 27% in 2016 to 25% in 2018.
Though the company has been spending more due to the FIFA World Cup 2018, as a % of revenue it decreased due to faster growth in the top line.
Additionally, though freight cost increased, lower volume sales have driven the metric downward.
We expect this cost to decline further to about 24% of revenue in 2019 and 2020 as no major marketing campaign is scheduled in the near term.
Administrative Expense
Administrative cost decreased in 2018 leading it to drop to 6.3%, as a % of revenue.
However, with the company listing its Asia-Pacific business in Hong Kong, the additional expenses related to this would drive administrative expenses as a % of revenue to about 6.5%
Net Finance Expense
Net Finance cost as % of revenue has increased from 11.4% in 2016 to 12.4% in 2018, led by higher indebtedness due to SABMiller acquisition and rising interest rates.
However, with the company focusing on deleveraging, to understand how Anheuser-Busch’s net finance charges are expected to trend going forward, view our interactive dashboard analysis.
Non-Recurring Net Finance Cost
Non-recurring net finance cost increased from 1.2% in 2017 to 3.6% in 2018 due to higher mark-to-market losses. The metric is expected to be stable around 3% in the near term.
Restructuring Cost
Restructuring cost was high in 2017 due to the SABMiller acquisition in late 2016.
However, cost went down in 2018 as the integration expenses reduced.
With most of the integration already behind the company, restructuring cost as % of revenue is set to drop further to about 0.5% of revenue.
Acquisition Cost
Acquisition cost has been declining post 2016 after the acquisition of SABMiller.
With most of the acquisition costs already incurred and with the company already having spent money to recover the Budweiser distribution rights in Argentina from Compañia Cervecerías Unidas S.A., the metric is expected to remain around 0.1% in the near term.
Other Expense/(Income)
Other income has decreased in 2018, due to lower income from associates and joint ventures, decrease in proceeds from sale of property and license fee, along with one-time expense related to a European Union investigation.
However, other income is expected to increase going forward, in the absence of one-time expenses.
Effective Tax Rate
Effective tax rate increased sharply from 17.3% in 2017 to 33.3% in 2018, mainly due to non-deductible mark-to-market losses and changes in tax legislation in some of the countries.
The metric is expected to remain around 30% going forward.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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To understand the trend in all major expense items and what is driving the change, view the Trefis interactive dashboard – How Does Anheuser-Busch InBev Spend Its Money? However, with the company focusing on deleveraging, to understand how Anheuser-Busch’s net finance charges are expected to trend going forward, view our interactive dashboard analysis. With most of the acquisition costs already incurred and with the company already having spent money to recover the Budweiser distribution rights in Argentina from Compañia Cervecerías Unidas S.A., the metric is expected to remain around 0.1% in the near term.
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However, the metric is projected to decline in the near term led by higher revenues and the company’s focus on deleveraging Breakdown Of Anheuser-Busch InBev’s Total Expenses Cost of Sales Cost of sales as % of revenue has steadily declined from 39.1% in 2016 to 37.3% in 2018. However, with the company listing its Asia-Pacific business in Hong Kong, the additional expenses related to this would drive administrative expenses as a % of revenue to about 6.5% Net Finance Expense Net Finance cost as % of revenue has increased from 11.4% in 2016 to 12.4% in 2018, led by higher indebtedness due to SABMiller acquisition and rising interest rates. Non-Recurring Net Finance Cost Non-recurring net finance cost increased from 1.2% in 2017 to 3.6% in 2018 due to higher mark-to-market losses.
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Total Expenses Anheuser-Busch’s total expenses as % of revenue decreased in 2017 before increasing to 89.6% in 2018 due to higher finance cost and increased tax outgo, along with the drop in revenues. However, the metric is projected to decline in the near term led by higher revenues and the company’s focus on deleveraging Breakdown Of Anheuser-Busch InBev’s Total Expenses Cost of Sales Cost of sales as % of revenue has steadily declined from 39.1% in 2016 to 37.3% in 2018. However, with the company listing its Asia-Pacific business in Hong Kong, the additional expenses related to this would drive administrative expenses as a % of revenue to about 6.5% Net Finance Expense Net Finance cost as % of revenue has increased from 11.4% in 2016 to 12.4% in 2018, led by higher indebtedness due to SABMiller acquisition and rising interest rates.
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To understand the trend in all major expense items and what is driving the change, view the Trefis interactive dashboard – How Does Anheuser-Busch InBev Spend Its Money? Total Expenses Anheuser-Busch’s total expenses as % of revenue decreased in 2017 before increasing to 89.6% in 2018 due to higher finance cost and increased tax outgo, along with the drop in revenues. However, the metric is projected to decline in the near term led by higher revenues and the company’s focus on deleveraging Breakdown Of Anheuser-Busch InBev’s Total Expenses Cost of Sales Cost of sales as % of revenue has steadily declined from 39.1% in 2016 to 37.3% in 2018.
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727745.0
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2019-12-05 00:00:00 UTC
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The Honey Acquisition Could Be the Next Big Mover for PayPal Stock
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DEO
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https://www.nasdaq.com/articles/the-honey-acquisition-could-be-the-next-big-mover-for-paypal-stock-2019-12-05
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Recently, PayPal Holdings (NASDAQ:) announced that it would be spending $4 billion to buy Honey Science, a technology platform that helps users save money while shopping. How it will affect PayPal stock in the long term is a little complex.
Source: JHVEPhoto / Shutterstock.com
This deal has provoked a great deal of controversy. Honey is not a large business at this time, and its last funding round was for far less than PayPal just offered for the firm. Is PayPal making a shrewd move or a strategic blunder? And what’s it mean for Paypal stock going forward?
Our Aaron Levitt . According to Levitt, while Paypal has done a great job expanding its share in the payment space, it hasn’t done enough to interact with consumers prior to them getting to the checkout stage of their online purchases. Enter Honey.
By controlling more of the online shopping process, Paypal should be able to help funnel more traffic into transactions that end up getting processed through Paypal rather than other means. As Levitt explains, rivals are making more and more sophisticated entrants into the payment space, and will soon eat away Paypal’s market share if it sits idly by. This Honey acquisition would be a forward-thinking effort to extend Paypal’s first-mover advantage and knock the competition back a step or two.
Additionally, it’s worth noting that while Honey is not a sizable business, yet it is profitable already. This reduces the risk to Paypal. They may be overpaying, but it’s not likely to be a disaster for PayPal even if the $4 billion valuation is a stretch. Notably, Paypal sees the deal being accretive to earnings by 2021.
Honey: Has PayPal Kicked A Beehive?
While there is clearly some potential upside for PayPal stock with Honey, they paid a huge price. Honey has around 17 million active users every month. This means that PayPal paid more than $200 per person who uses Honey regularly. That’s simply a massive price. How long will it take PayPal to earn anything close to that amount back from each Honey member?
Coupons and price-saving services don’t usually attract high-margin free-spending customers in the first place. Other stocks targeting online savings, such as Groupon (NASDAQ:) haven’t exactly been huge winners. There’s also a ton of apps that already compete with Honey in the digital coupon space.
If PayPal is able to use its size to drive the competition off, maybe this deal becomes a long-run winner. I think the market is right to be skeptical for now, however.
Two of Britain’s Top Funds Love PayPal Stock
One interesting thing with PYPL stock is that it has attracted some surprising institutional investors. For example, two of the United Kingdom’s top mutual funds both have maintained large positions in PayPal stock over the years.
Both Fundsmith and Lindsell Train have owned PayPal faithfully; Lindsell Train has been a shareholder since the eBay (NASDAQ:) spin-off days. Fundsmith and Lindsell Train are two of the UK’s biggest funds, and both have delivered jaw-dropping returns; Fundsmith is up 153% and Lindsell Train is up 148% over the past five years. Those figures crush both the S&P 500 and the relevant British benchmark.
Both of these rock star mutual funds have PayPal stock as a top-five holding. That’s a surprising and reassuring endorsement as these funds are viewed as Warren Buffett-style conservative buy and hold shops. The two funds’ other shared holdings are much more conservative, with both funds also owning names like Pepsico (NYSE:) and liquor maker Diageo (NYSE:).
Yet they own large stakes in PayPal; they have faith in the company’s consumer reach. In the past, for example, Lindsell Train has said that PayPal has a fantastic brand and will pick up more and more loyal users over time; they also believe PayPal is more resistant to competitive pressure from the credit card issuers than analysts expect.
PayPal Stock Verdict
Regardless of your outlook on the Honey deal, do keep in mind that PYPL stock’s current market cap is $125 billion. Sometimes a small deal can turn out to be a home run, see Facebook (NASDAQ:) buying Instagram, for example. But Honey isn’t likely to make a huge difference in PayPal’s overall trajectory.
On the other hand, at worst, it will only cost PayPal stock about 3% of its market value if Honey ends up being a worthless acquisition in the long run.
And I have to give a ton of credit to PayPal for developing a credible investment story over the years, and attracting superstar investors into the fold. PayPal has built something great since it split off from eBay.
That’s what makes this Honey deal all the more perplexing. Companies like PayPal and Square (NYSE:) are compelling vehicles to play the “less cash” society investing theme. So why do these firms keep diluting themselves with less attractive side businesses such as Square’s meal delivery service, or this $4 billion app acquisition by PayPal?
If the opportunity is as bright as it seems, there’s no need to add more distractions to the mix. Perhaps Honey really will drive much more traffic through PayPal’s main lines of business, but I’m far from convinced at this point.
At the time of this writing, Ian Bezek owned DEO and FB stock. You can reach him on Twitter at @irbezek.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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At the time of this writing, Ian Bezek owned DEO and FB stock. Recently, PayPal Holdings (NASDAQ:) announced that it would be spending $4 billion to buy Honey Science, a technology platform that helps users save money while shopping. According to Levitt, while Paypal has done a great job expanding its share in the payment space, it hasn’t done enough to interact with consumers prior to them getting to the checkout stage of their online purchases.
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At the time of this writing, Ian Bezek owned DEO and FB stock. By controlling more of the online shopping process, Paypal should be able to help funnel more traffic into transactions that end up getting processed through Paypal rather than other means. While there is clearly some potential upside for PayPal stock with Honey, they paid a huge price.
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At the time of this writing, Ian Bezek owned DEO and FB stock. While there is clearly some potential upside for PayPal stock with Honey, they paid a huge price. In the past, for example, Lindsell Train has said that PayPal has a fantastic brand and will pick up more and more loyal users over time; they also believe PayPal is more resistant to competitive pressure from the credit card issuers than analysts expect.
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At the time of this writing, Ian Bezek owned DEO and FB stock. Honey is not a large business at this time, and its last funding round was for far less than PayPal just offered for the firm. Yet they own large stakes in PayPal; they have faith in the company’s consumer reach.
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3f88f3a8-4c43-4151-b44d-77eb743dc784
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727746.0
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2019-12-05 00:00:00 UTC
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How Much Does Alcoholic Beverages Giant Diageo Spend On Marketing Activities Each Year?
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DEO
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https://www.nasdaq.com/articles/how-much-does-alcoholic-beverages-giant-diageo-spend-on-marketing-activities-each-year
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nan
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Diageo (NYSE: DEO) expenses are largely driven by cost of sales, which account for about 50% of the company’s total expenses. Over recent years, Diageo’s total expenses have been rising, whereas, revenues have seen some volatility. This has led to a rise in total expenses as % of revenue in FY 2019 (after a drop in FY 2018). However, Trefis estimates a marginal drop in total expenses as % of revenue from 75.4% in FY 2018 to 75% FY 2019. To understand the trend in all major expense items and what is driving the change, view the Trefis interactive dashboard – How Does Diageo Spend Its Money?
Total expenses
Total expenses as a % of revenue decreased from 77.5% in 2017 to 73% in 2018, followed by an increase to 75.4% in FY 2019, driven by higher commodity costs and increased marketing investment.
The metric is expected to drop marginally to 75% in FY 2020, driven by faster growth in revenues and productivity savings from cost efficiencies.
Breakdown of Diageo’s Total Expenses
Cost of Sales
Cost of sales, which accounts for 50% of Diageo’s total expenses, has remained flat in FY 2019, however, as a % of revenue it has increased, mainly due to a fall in revenues, exacerbated by a marginal rise in commodity costs.
However, the metric is expected to drop a little from 37.8% in FY 2019 to 37.6% in FY 2020 despite inflationary pressure, mainly driven by higher growth in revenues in the near term.
Marketing Expense
Marketing expense as a % of revenue has been increasing in recent years, from 14.9% in FY2017 to 15.9% in FY2019.
The trend is expected to continue in the near term with the metric expected to rise to 16.2% in FY 2020, led by increased marketing spending especially for US Spirits.
Other Operating Expense
Other operating expense as % of revenue has been decreasing steadily from 16.7% in FY 2017 to 14.9% in 2019.
The trend is expected to continue with the metric expected to drop further to 14.5% in FY 2020, led by productivity benefits from cost efficiencies.
Net Finance Charges
Net finance charges have been decreasing despite higher interest payout on the back of increased debt, mainly due to higher interest income.
To understand how Diageo’s net finance charges are expected to trend going forward, view our interactive dashboard analysis.
Other Non-Operating Expense
The company has been earning non-operating income (instead of incurring expenses) over the last few years, mainly comprising of income from associates and joint ventures.
This income is expected to continue in the near term, as non-operating expenses are set to be very low.
Effective Tax Rate
Effective tax rate decreased in FY 2018 due to tax credits received, but it increased to 21.2% in FY 2019.
The metric is expected to remain around the current level going forward, as well.
What’s behind Trefis? See How it’s Powering New Collaboration and What-Ifs
For CFOs and Finance Teams | Product, R&D, and Marketing Teams
More Trefis Data
Like our charts? Explore example interactive dashboards and create your own.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (NYSE: DEO) expenses are largely driven by cost of sales, which account for about 50% of the company’s total expenses. To understand the trend in all major expense items and what is driving the change, view the Trefis interactive dashboard – How Does Diageo Spend Its Money? The metric is expected to drop marginally to 75% in FY 2020, driven by faster growth in revenues and productivity savings from cost efficiencies.
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Diageo (NYSE: DEO) expenses are largely driven by cost of sales, which account for about 50% of the company’s total expenses. Breakdown of Diageo’s Total Expenses Cost of Sales Cost of sales, which accounts for 50% of Diageo’s total expenses, has remained flat in FY 2019, however, as a % of revenue it has increased, mainly due to a fall in revenues, exacerbated by a marginal rise in commodity costs. To understand how Diageo’s net finance charges are expected to trend going forward, view our interactive dashboard analysis.
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Diageo (NYSE: DEO) expenses are largely driven by cost of sales, which account for about 50% of the company’s total expenses. However, Trefis estimates a marginal drop in total expenses as % of revenue from 75.4% in FY 2018 to 75% FY 2019. Total expenses Total expenses as a % of revenue decreased from 77.5% in 2017 to 73% in 2018, followed by an increase to 75.4% in FY 2019, driven by higher commodity costs and increased marketing investment.
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Diageo (NYSE: DEO) expenses are largely driven by cost of sales, which account for about 50% of the company’s total expenses. Total expenses Total expenses as a % of revenue decreased from 77.5% in 2017 to 73% in 2018, followed by an increase to 75.4% in FY 2019, driven by higher commodity costs and increased marketing investment. The trend is expected to continue in the near term with the metric expected to rise to 16.2% in FY 2020, led by increased marketing spending especially for US Spirits.
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1d27b306-8b94-43c2-b204-d9ccf33620e4
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727747.0
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2019-12-02 00:00:00 UTC
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10 Buy-and-Hold Stocks to Own Forever
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DEO
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https://www.nasdaq.com/articles/10-buy-and-hold-stocks-to-own-forever-2019-12-02
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nan
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nan
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[Editor’s note: “10 Buy-and-Hold Stocks to Own Forever” was previously published in September 2019. It has since been updated to include the most relevant information available.]
Investing to “buy and hold” is trickier than it looks. The increasing pace of technological change means even the most successful, dominant companies have to continually adapt to keep up. Industries like energy, real estate and even consumer products are facing potentially significant long-term changes going forward.
In any era, amassing a collection of retirement stocks simply by buying the best companies and holding them for years can be a risky endeavor.
General Motors (NYSE:) was a classic “widows and orphans” stock until the last decade when GM wound up going bankrupt. United States Steel (NYSE:) once was a pillar of corporate America and a buy-and-hold stock. Polaroid and Eastman Kodak were once blue-chip stocks. Both went bankrupt as cameras changed from film to digital.
But there still are stocks to buy and hold out there that can last forever, while offering dividend income along the way.
Here are ten such retirement stocks to buy and hold forever.
Bank of America (BAC)
Source: Tero Vesalainen / Shutterstock.com
Dividend Yield: 2.15%
It might seem strange to open the list with Bank of America (NYSE:). After all, we’re only a bit more than a decade on from the financial crisis.
During that crisis, BofA acquisition Countrywide Financial blew up in spectacular fashion, after pioneering many of the risky tactics that led to the bubble and subsequent bust.
But this is a different BofA.
Net consumer charge-offs hit a decade-long low last year. Its performance on credit metrics is strong. Government regulations have been criticized as slowing growth — but they’ve undoubtedly lowered risk as well, even if observers might argue that a better balance is needed.
No less than , through his Berkshire Hathaway Inc. (NYSE:, NYSE:BRK.B). And the Oracle of Omaha is fond of saying that his favorite holding period is “forever.”
That seems likely true for BAC stock as well.
Diageo (DEO)
Dividend Yield: 2.1%
Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by Diageo (NYSE:) are well-positioned to adapt to shifting tastes.
Diageo owns classic brands like Johnnie Walker whiskey, Tanqueray gin, Smirnoff vodka, and Harp and Guinness beer, among many others. What most have in common is a timeless quality and worldwide brand recognition.
As a result, while beverage giants like Coca-Cola (NYSE:) and Anheuser Busch InBev (NYSE:) have struggled with profit growth, Diageo grew operating profits by 5.8% in fiscal 2019 and expects consistent growth going forward.
Yet with a trailing multiple of 24.3, and with a dividend yield of 2.1%, Diageo stock isn’t all that dearly valued. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
Medtronic (MDT)
Source: JHVEPhoto / Shutterstock.com
Dividend Yield: 1.95%
In this day and age, the U.S. healthcare market, in particular, seems potentially volatile. Concerns about increased spending and political battles over the Affordable Care Act create more questions than answers.
But even with that uncertainty, Medtronic (NYSE:) isn’t going anywhere. The company’s devices are an integral part of modern medicine, ranging from pacemakers to stents to bone grafts to imaging systems.
Even the risks involved in the sector look priced into MDT. Medtronic’s days of double-digit annual growth may well be behind it, but it’s not finished increasing earnings or dividends. MDT stock likely isn’t finished rising, either.
NextEra Energy (NEE)
Source: Shutterstock
Dividend Yield: 2.15%
Utility stocks are among the most common safe, buy-and-hold stocks. NextEra Energy (NYSE:) is now the largest electric utility in the U.S. by market capitalization. That might actually be the only problem with NEE stock.
NextEra shares gained 34% year-to-date, and trades just off record highs. Potential valuation concerns aside, NextEra looks like a winner. It serves customers in the southern Florida region, still one of the nation’s fastest-growing areas.
A 35 P/E multiple is high for the space but not outlandishly so. And a 2.15% dividend yield provides income along the way.
Investors looking for value in the space might look for a smaller play like cheaper Dominion Energy (NYSE:). But it’s usually worth paying for quality, and NextEra Energy looks like one of the best utility stocks out there.
McCormick & Company (MKC)
Source: Shutterstock
Dividend Yield: 1.47%
McCormick & Company (NYSE:) is another quality company whose valuation might spook some investors. But MKC stock very rarely is offered cheaply.
The company’s market leadership in spices and seasonings provides both an impressive moat and protection against economic downturns. MKC stock did dip after the company sauce from Reckitt Benckiser (OTCMKTS:) at a price that looked a bit high to many investors. But MKC has recovered those gains and then some.
Top-line growth for McCormick likely isn’t going to be explosive, but it will be steady. The same has been true of MKC stock, which has returned an average of 13% a year over the past decade, including dividends.
With continuous cost-cutting initiatives, the contribution from the acquired brands and organic growth (and growth in organic products), MKC still should be able to provide double-digit annual returns going forward as well.
Allstate (ALL)
Source: Shutterstock
Dividend Yield: 1.8%
Allstate Corp (NYSE:) long has used the tagline, “You’re in good hands,” and it’s true for Allstate investors as well.
ALL stock has almost quadrupled from late-2011 lows. And there could be more upside to come. After all, Allstate isn’t particularly expensive, trading at a 14 P/E.
Once any short-term worries subside, ALL should resume its march upward.
International Flavors & Fragrances (IFF)
Source: Shutterstock
Dividend Yield: 2.52%
International Flavors & Fragrances (NYSE:) is a company most consumers encounter every day without knowing it and many investors aren’t exactly hip to it, either.
As its name suggests, the company develops flavors & fragrances across 13 categories, including cosmetics, perfumes, beverages and sweet flavors. Sales and earnings have increased consistently and so has IFF’s share price. At a 53 P/E, IFF does look a bit pricey. But, as with McCormick and other stocks on this list, investors should pay for quality.
IFF’s hidden, but key role, in so many industries, gives it a great deal of protection against both competition and macro factors. Acquisitions and a growing cosmetic additive business both provide room for growth.
Consumers may not know IFF, but investors should.
Lamb Weston (LW)
Source: Shutterstock
Dividend Yield: 0.95%
Lamb Weston (NYSE:) was spun off from Conagra Brands (NYSE:) last year. Lamb Weston is the No. 1 potato producer in the United States. In fact, it manufactures the well-known fries at McDonald’s (NYSE:), among other restaurant chains.
Lamb Weston also has a consumer business (including a small segment that manufactures frozen vegetables), while serving restaurants of all sizes. Health concerns might seem a long-term headwind against the business, but growth has been steady for years, and margins continue to improve.
LW is targeting international markets for growth, as French fries have much more limited penetration, while international audiences generally are intrigued by Americanized products.
Despite growth and leading market share, LW stock isn’t particularly cheap, trading at about 23 times next year’s earnings. The company did pick up a fair amount of debt in the CAG spinoff. But it’s paying that debt down, which should lower interest expense and boost cash flow going forward.
With many similar stocks trading at much higher multiples, LW seems to have room for upside. And international growth should offset any health-related concerns in the U.S., should they arise. America’s love affair with French fries isn’t going to suddenly end, and that should ensure years of stability for Lamb Weston at least.
Fortune Brands (FBHS)
Source: Shutterstock
Dividend Yield: 1.4%
Investors are commonly advised to diversify their portfolio. Fortune Brands Home & Security (NYSE:) has done just that.
The company operates in four segments: Cabinets, Plumbing, Doors, and Security. Among its well-known brands are Moen in plumbing, and MasterLock in security.
FBHS is more of a cyclical stock than most on this list, and the company no doubt has benefited from the steady if slow, housing recovery in the U.S.
But the company’s products also generate relatively stable replacement demand, and a 1.4% dividend yield provides modest, but growing, income.
Fortune Brands has been an impressive company since its founding and a solid stock since its 2011 IPO. There may be a bit more volatility here, but that’s a worthwhile price to pay for long-term investors. There’s enough value in Fortune Brands to ride out any market jitters.
Republic Services (RSG)
Source: Shutterstock
Dividend Yield: 1.8%
Republic Services (NYSE:) is a bit smaller and likely a lot less well-known than rival Waste Management (NYSE:). But in this case, that’s not necessarily a bad thing.
Republic Services has outgrown its larger competitor in both sales and earnings over the past five years. RSG stock has modestly outperformed WM over the same period as well. Investors appear to believe that will continue, as Republic Services is valued a bit higher than Waste Management, at least based on forward earnings multiples.
Both RSG and WM are solid long-term plays. Contracted revenue and steady demand should support both companies for years to come. There’s room for further acquisitions in a relatively fragmented space. Republic Services gets the nod here due to slightly better growth and more room for margin improvement.
But investors looking for safe, stable growth can’t go wrong with either RSG or WM.
As of this writing, Vince Martin was long MKC.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (DEO) Dividend Yield: 2.1% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. During that crisis, BofA acquisition Countrywide Financial blew up in spectacular fashion, after pioneering many of the risky tactics that led to the bubble and subsequent bust.
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Diageo (DEO) Dividend Yield: 2.1% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. International Flavors & Fragrances (IFF) Source: Shutterstock Dividend Yield: 2.52% International Flavors & Fragrances (NYSE:) is a company most consumers encounter every day without knowing it and many investors aren’t exactly hip to it, either.
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Diageo (DEO) Dividend Yield: 2.1% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. McCormick & Company (MKC) Source: Shutterstock Dividend Yield: 1.47% McCormick & Company (NYSE:) is another quality company whose valuation might spook some investors.
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Diageo (DEO) Dividend Yield: 2.1% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. NextEra Energy (NEE) Source: Shutterstock Dividend Yield: 2.15% Utility stocks are among the most common safe, buy-and-hold stocks.
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f76f095f-1695-4d5a-9c1c-e3da06d2253d
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727748.0
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2019-11-07 00:00:00 UTC
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The Implied Analyst 12-Month Target For PID
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DEO
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https://www.nasdaq.com/articles/the-implied-analyst-12-month-target-for-pid-2019-11-07
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nan
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nan
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Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the Invesco International Dividend Achievers ETF (Symbol: PID), we found that the implied analyst target price for the ETF based upon its underlying holdings is $18.14 per unit.
With PID trading at a recent price near $16.38 per unit, that means that analysts see 10.74% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of PID's underlying holdings with notable upside to their analyst target prices are Nielsen Holdings PLC (Symbol: NLSN), Diageo plc (Symbol: DEO), and RELX PLC (Symbol: RELX). Although NLSN has traded at a recent price of $20.09/share, the average analyst target is 38.13% higher at $27.75/share. Similarly, DEO has 18.68% upside from the recent share price of $160.51 if the average analyst target price of $190.50/share is reached, and analysts on average are expecting RELX to reach a target price of $28.00/share, which is 17.80% above the recent price of $23.77. Below is a twelve month price history chart comparing the stock performance of NLSN, DEO, and RELX:
Below is a summary table of the current analyst target prices discussed above:
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Below is a twelve month price history chart comparing the stock performance of NLSN, DEO, and RELX: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of PID's underlying holdings with notable upside to their analyst target prices are Nielsen Holdings PLC (Symbol: NLSN), Diageo plc (Symbol: DEO), and RELX PLC (Symbol: RELX). Similarly, DEO has 18.68% upside from the recent share price of $160.51 if the average analyst target price of $190.50/share is reached, and analysts on average are expecting RELX to reach a target price of $28.00/share, which is 17.80% above the recent price of $23.77.
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Three of PID's underlying holdings with notable upside to their analyst target prices are Nielsen Holdings PLC (Symbol: NLSN), Diageo plc (Symbol: DEO), and RELX PLC (Symbol: RELX). Similarly, DEO has 18.68% upside from the recent share price of $160.51 if the average analyst target price of $190.50/share is reached, and analysts on average are expecting RELX to reach a target price of $28.00/share, which is 17.80% above the recent price of $23.77. Below is a twelve month price history chart comparing the stock performance of NLSN, DEO, and RELX: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now?
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Similarly, DEO has 18.68% upside from the recent share price of $160.51 if the average analyst target price of $190.50/share is reached, and analysts on average are expecting RELX to reach a target price of $28.00/share, which is 17.80% above the recent price of $23.77. Below is a twelve month price history chart comparing the stock performance of NLSN, DEO, and RELX: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of PID's underlying holdings with notable upside to their analyst target prices are Nielsen Holdings PLC (Symbol: NLSN), Diageo plc (Symbol: DEO), and RELX PLC (Symbol: RELX).
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Three of PID's underlying holdings with notable upside to their analyst target prices are Nielsen Holdings PLC (Symbol: NLSN), Diageo plc (Symbol: DEO), and RELX PLC (Symbol: RELX). Similarly, DEO has 18.68% upside from the recent share price of $160.51 if the average analyst target price of $190.50/share is reached, and analysts on average are expecting RELX to reach a target price of $28.00/share, which is 17.80% above the recent price of $23.77. Below is a twelve month price history chart comparing the stock performance of NLSN, DEO, and RELX: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now?
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c5e66495-0b82-4cc1-8b35-64f5ed6a00d8
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727749.0
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2019-11-04 00:00:00 UTC
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How Much Does Anheuser-Busch InBev Depend On Asia-Pacific For Its Growth?
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DEO
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https://www.nasdaq.com/articles/how-much-does-anheuser-busch-inbev-depend-on-asia-pacific-for-its-growth-2019-11-04
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nan
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nan
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Asia-Pacific (APAC) has maintained its position as the fastest growing revenue segment for Anheuser-Busch InBev (NYSE: BUD). Over the last two years, while Anheuser-Buschâs total revenue (shows BUDâs key revenue components) increased by $0.67 billion between 2016 and 2018, the APAC division saw its revenues increase by $1.22 billion during the same period. Can Asia-Pacific continue to command the kind of significance it recently has seen? To understand this, please refer to the Trefis interactive dashboard â What Is The Importance of Asia Pacific In Anheuser-Busch InBevâs Growth? In addition, here is more Consumer Staples data.
Division Overview
What is on Offer?
The APAC division includes Anheuser-Busch InBev’s business in China, India, Japan, South Korea, Vietnam, and other South and Southeast Asian countries.
Some of its brand offerings include: Budweiser, Hoegaarden, Stella Artois, Harbin, Sedrin, Cass, etc.
Who Pays?
All beer and cider customers worldwide are potential end buyers. On the basis of quality and price, Anheuser’s beer offerings can be differentiated into: (i) Premium or high-end brands; (ii) Core Brands; and (iii) Value, discount, or sub-premium brands.
For example, the global brand Stella Artois targets the premium category, while the local brand Harbin targets the core category in China.
Competition?
BUD faces competition from- Snow Beer: Snow; Tsingtao Brewery: Tsingtao, Laoshan; Lion: James Boag’s Premium, Boag’s Draught, Emu Bitter; Carlsberg: Carlsberg, Wusu, Dali Beer; and Microbreweries.
Segment Revenue Trend
APAC revenue increased from $7.25 billion in 2016 to $8.47 billion in 2018, adding $1.22 billion in two years.
The segment is expected to add another $0.61 billion by 2020, driven by healthy organic growth led by increasing premiumization and strong overall performance of the companyâs e-commerce business, especially in China.
To understand the performance of other operating segments, refer to the following Trefis analysis-Â Anheuser-Busch InBev Revenues: How Does Anheuser-Busch InBev Make Money?
Volume Share
APAC’s volume share in BUD’s total volume sales has increased from 16.5% in 2016 to 18.4% in 2018.
This was primarily driven by higher demand in emerging markets like India and China, along with lower beer sales in North America, as people are moving away from carbonated beverages.
Segment share is expected to grow further to over 19% by 2020, led by strong e-commerce sales in China and slower growth in developed markets.
Revenue Share
APAC has been the fastest growing segment for the company, with its share in total revenues increasing from 13.4% in 2016 to 15.5% in 2018.
Despite slowdown in overall sales growth, APAC is likely to see healthy growth in its revenue base, driven mainly by strong growth in India and China. taking the segment’s revenue share close to 16% by 2020.
Though North America is the largest segment for the company, the higher rate of growth in APAC is helping the segment eat into North America’s revenue share.
Profitability
APAC division’s gross margins have always been lower than the company’s in the past, mainly due to higher proportion of sales of premium brands in developed markets such as North America and Europe.
However, with the company now focusing on increasing premiumization across all markets, along with strong e-commerce infrastructure and sales in China, the segment’s gross margins are expected to see better growth compared to BUD.
The gap between APAC’s and BUD’s margins is expected to narrow in the next 2 years.
Conclusion
The companyâs management expects the APAC division to be the primary growth and value driver for the company, due to which it recently listed its APAC operation on the Hong Kong stock exchange, which fetched the company about $5 billion. The segment is likely to be the companyâs fastest growing division, with its improving profitability helping it to catch up with the companyâs high margins.
As per Anheuser-Buschâs Valuation by Trefis, we have a price estimate of $103 per share for BUDâs stock.
Whatâs behind Trefis? See How itâs Powering New Collaboration and What-Ifs
For CFOs and Finance Teams | Product, R&D, and Marketing Teams
More Trefis Data
Like our charts? Explore example interactive dashboards and create your own.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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This was primarily driven by higher demand in emerging markets like India and China, along with lower beer sales in North America, as people are moving away from carbonated beverages. Profitability APAC division’s gross margins have always been lower than the company’s in the past, mainly due to higher proportion of sales of premium brands in developed markets such as North America and Europe. However, with the company now focusing on increasing premiumization across all markets, along with strong e-commerce infrastructure and sales in China, the segment’s gross margins are expected to see better growth compared to BUD.
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For example, the global brand Stella Artois targets the premium category, while the local brand Harbin targets the core category in China. The segment is expected to add another $0.61 billion by 2020, driven by healthy organic growth led by increasing premiumization and strong overall performance of the companyâs e-commerce business, especially in China. Volume Share APAC’s volume share in BUD’s total volume sales has increased from 16.5% in 2016 to 18.4% in 2018.
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Over the last two years, while Anheuser-Buschâs total revenue (shows BUDâs key revenue components) increased by $0.67 billion between 2016 and 2018, the APAC division saw its revenues increase by $1.22 billion during the same period. Revenue Share APAC has been the fastest growing segment for the company, with its share in total revenues increasing from 13.4% in 2016 to 15.5% in 2018. Though North America is the largest segment for the company, the higher rate of growth in APAC is helping the segment eat into North America’s revenue share.
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Asia-Pacific (APAC) has maintained its position as the fastest growing revenue segment for Anheuser-Busch InBev (NYSE: BUD). Revenue Share APAC has been the fastest growing segment for the company, with its share in total revenues increasing from 13.4% in 2016 to 15.5% in 2018. Whatâs behind Trefis?
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456d394a-e6e9-4fc4-9ded-82470200a307
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727750.0
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2019-11-01 00:00:00 UTC
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Ambev Stock: 3 Significant Risks, 3 Reasons to Buy Anyway
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DEO
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https://www.nasdaq.com/articles/ambev-stock%3A-3-significant-risks-3-reasons-to-buy-anyway-2019-11-01
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nan
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nan
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Ambev (NYSE:) stock presents a conundrum for investors. The long-term drop in the equity and the dividend may point to a potential bargain. However, political and business headwinds in Brazil point to significant challenges. Deciding whether to buy Ambev stock, investors must weigh these benefits against both the risk and their risk tolerance.
Source: Anton Garin / Shutterstock.com
Most Americans have few reasons to know Ambev. The São Paulo-based brewery is a subsidiary of Interbrew International, a subsidiary of Anheuser-Busch InBev (NYSE:). For most residents of the U.S., their familiarity with the company likely revolves around Labatt Blue, a familiar brand for those who visit Canada. Outside of the Canadian connection, Ambev operates in Latin America, primarily in its home market of Brazil.
3 Notable Risks of Ambev Stock
This unfamiliarity with AmBev stock likely extends to its significant risks. For one, Ambev faces ongoing political turmoil in its home country. The company is currently contending with an antitrust complaint filed by competitors in Brazil. A group of 110 resellers and distributors alleges that ABEV has used its market position to push abusive commercial policies. If found guilty, AmBev could face a fine ranging from 0.1% to 20% of its revenue.
Also, in 2015, Ambev was tied to the corruption scandal in Brazil. However, Ambev products faced a massive tax increase that year, despite charges that the firm made “inappropriate payments” to two former Brazilian presidents to prevent the hike. However, the . To Vince Martin’s point, that would either point to the company’s innocence or highlight how poorly the firm has mastered the art of bribery.
Secondly, Vince Martin also makes another great point about the Brazil beer market itself. Brazil was the only one of the company’s regions to decline in the first six months of the year. It also accounts for more than half of company profits. Many blame an amid overall growth in the beer market. However, this may have begun to recover as the Brazil region saw modest revenue growth in the third quarter.
Third, ABEV stock has experienced a downtrend since peaking at more than $9 per share in early 2013. After recovering to the $7.25 per share range in March 2018, the stock tanked, falling below $4 per share by the end of that year. It has spent about 18 months trading in a range and sells for around $4.30 per share as of the time of this writing.
These risks increase the uncertainty surrounding ABEV stock. As of now, the company supports a forward price-earnings (PE) ratio of around 20.5. This might seem high for a company expected to post no profit growth this year and a 10.5% earnings increase in 2020.
3 Reasons to Buy ABEV
However, ABEV stock offers some reward for the risks. First, the current dividend yield stands at 5.2%, assuming the expected 24 cent per share gets paid. The company pays a varied dividend on a non-consistent basis. It seems especially inconsistent as it has not yet made a payout in 2019.
Secondly, the aforementioned 20.5 forward PE comes in much lower than the multiple for Constellation Brands (NYSE:) and Diageo (NYSE:). It also offers a higher dividend yield than Molson Coors (NYSE:). While not the cheapest alcoholic beverage equity, it offers some unique benefits for investors willing to invest.
Third, revenue also continues to hold up well. In the recent quarterly report, profits fell by 15.8% year-over-year due to higher income taxes. However, overall revenue increased by 5.9%. The only region to experience a decline was Canada, where they face more intense competition from craft beer. It also saw its highest growth in the Latin America south region, which prospers despite the economic turmoil in Argentina.
Should I Buy ABEV Stock?
Investors have good reasons to both avoid or take a chance on ABEV stock. The risks associated with the legal and business environment in Brazil may give investors second thoughts about buying at current levels. However, it has offered a generous, if volatile dividend. It also trades well compared to other alcoholic beverage peers. Growth in some regions also points to its resilience.
As customers and Ambev adapt to the higher taxes, I expect profit growth to resume. Moreover, given the revenue growth, I expect the downward move in ABEV stock to break at some point. For those wanting a beverage stock and do not mind the risk, they should consider Ambev stock.
As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can at @HealyWriting.
More From InvestorPlace
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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A group of 110 resellers and distributors alleges that ABEV has used its market position to push abusive commercial policies. However, Ambev products faced a massive tax increase that year, despite charges that the firm made “inappropriate payments” to two former Brazilian presidents to prevent the hike. The risks associated with the legal and business environment in Brazil may give investors second thoughts about buying at current levels.
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This might seem high for a company expected to post no profit growth this year and a 10.5% earnings increase in 2020. 3 Reasons to Buy ABEV However, ABEV stock offers some reward for the risks. While not the cheapest alcoholic beverage equity, it offers some unique benefits for investors willing to invest.
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Deciding whether to buy Ambev stock, investors must weigh these benefits against both the risk and their risk tolerance. 3 Notable Risks of Ambev Stock This unfamiliarity with AmBev stock likely extends to its significant risks. For those wanting a beverage stock and do not mind the risk, they should consider Ambev stock.
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This might seem high for a company expected to post no profit growth this year and a 10.5% earnings increase in 2020. 3 Reasons to Buy ABEV However, ABEV stock offers some reward for the risks. Growth in some regions also points to its resilience.
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2e41c773-153a-4d94-b18b-fa4b8156ac14
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727751.0
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2019-10-30 00:00:00 UTC
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How Important Is North America For Diageo’s Growth?
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DEO
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https://www.nasdaq.com/articles/how-important-is-north-america-for-diageos-growth-2019-10-30
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nan
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nan
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North America (NA) has maintained its position as the largest revenue segment for Diageo (NYSE: DEO) over recent years. Diageo’s Revenues (shows Diageo’s key revenue components) have increased from $15.4 billion in 2016 to $16.6 billion in 2019, adding about $1.2 billion in three years. During the same period, the North American division has added about $0.5 billion in revenue, thus accounting for 45% of the increase, whereas the other four divisions (Europe, Africa, Latin America, and Asia-Pacific) together accounted for the other 55%.
Can North America continue to command the kind of significance it used to? To understand this, please refer to the Trefis interactive dashboard – What Is The Importance Of North America In Diageo’s Business? In addition, here is more Consumer Staples data.
Division Overview
What is on Offer?
The North America business comprises US Spirits and Wines, Diageo Guinness USA (DGUSA), and Diageo Canada.
Product categories include: (i) Scotch Whiskey: Johnnie Walker, Crown Royal, J&B; (ii) Vodka: Smirnoff, Ciroc; (iii) Rum: Captain Morgan; (iv) Beer: Guinness; (v) Others: Baileys, Gordon’s Gin, etc.
Who is Paying?
Diageo offers a wide variety of alcohol products, ranging from value to ultra-premium categories that cater to a large alcohol-drinking customer base.
On the basis of quality and price, Diageo’s beverage offerings can be differentiated into: (i) Ultra-Premium Brands, (ii) Super Premium Brands, (iii) Premium Brands, (iv) Standard Brands, (v) Value Brands.
For example, Johnnie Walker Blue Label and Ciroc are ultra-premium brands, whereas Smirnoff and Baileys are standard brands.
Segment Revenue Trend
North America’s revenues have increased from $5.3 billion in 2016 to $5.8 billion in 2019, adding about $0.5 billion to its revenue base in three years.
The trend is expected to continue with Trefis estimating segment revenues to grow further to $6 billion in FY2020, driven by an increase in the share of scotch and growth in both Diageo Beer Company USA (DBC USA) and Canada.
To understand how other operating segments of Diageo have performed, please refer to the Trefis analysis – Diageo Revenues: How Does Diageo Make Money?
Volume Share
North America witnessed pressure in volume sales in 2017 and 2018, however, with increased marketing investment and campaigns, with rising scotch sales, total segment volume saw a turnaround in 2019.
NA’s volume share has been around 19%-20% over recent years.
Though it will remain range-bound in 2020, it might see marginal y-o-y decline despite absolute volume sales expected to increase.
This decrease in share would mainly reflect higher growth in Asia-Pacific volume sales after regulatory clarity for alcohol sale in India, and rising sales in China.
Revenue Share
Historically, North America has contributed a little over one-third of Diageo’s total revenues, with the segment holding the largest revenue share of 34-35% in the company.
Though the segment as well as company revenue is expected to increase in 2020, the segment contribution is expected to drop marginally (mainly due to faster growth in Asia-Pacific), though it would still remain range-bound between 34%-35%.
The division’s largest share is due to higher sale of DEO’s premium brands in the region which drives maximum price realization for North America among all divisions.
Most Profitable Segment
North America has been the most profitable division of Diageo, with its operating profit margin being about 1.5x of Diageo’s total operating profit margin.
Though segment margins are on a declining trend due to increased marketing investment and higher commodity and logistics cost, North America is expected to continue to be the primary driver of Diageo’s profitability in the near future.
Trefis estimates the segment operating profit margin to come in at 42% in FY2020, slightly lower compared to 43% in FY2019, but much higher than the 31% projected operating margin for Diageo.
Conclusion
North America is expected to maintain its position as the largest revenue segment for Diageo in 2020.
Additionally, though operating margins are expected to decline for the division, it would still be much more profitable compared to the company as a whole.
Therefore, North America is expected to continue to be the primary growth driver for Diageo in the near term.
As per Diageo’s Valuation by Trefis, we have a price estimate of $170 per share for DEO’s stock.
What’s behind Trefis? See How it’s Powering New Collaboration and What-Ifs
For CFOs and Finance Teams | Product, R&D, and Marketing Teams
All Trefis Data
Like our charts? Explore example interactive dashboards and create your own.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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North America (NA) has maintained its position as the largest revenue segment for Diageo (NYSE: DEO) over recent years. The division’s largest share is due to higher sale of DEO’s premium brands in the region which drives maximum price realization for North America among all divisions. As per Diageo’s Valuation by Trefis, we have a price estimate of $170 per share for DEO’s stock.
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North America (NA) has maintained its position as the largest revenue segment for Diageo (NYSE: DEO) over recent years. The division’s largest share is due to higher sale of DEO’s premium brands in the region which drives maximum price realization for North America among all divisions. As per Diageo’s Valuation by Trefis, we have a price estimate of $170 per share for DEO’s stock.
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North America (NA) has maintained its position as the largest revenue segment for Diageo (NYSE: DEO) over recent years. The division’s largest share is due to higher sale of DEO’s premium brands in the region which drives maximum price realization for North America among all divisions. As per Diageo’s Valuation by Trefis, we have a price estimate of $170 per share for DEO’s stock.
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The division’s largest share is due to higher sale of DEO’s premium brands in the region which drives maximum price realization for North America among all divisions. North America (NA) has maintained its position as the largest revenue segment for Diageo (NYSE: DEO) over recent years. As per Diageo’s Valuation by Trefis, we have a price estimate of $170 per share for DEO’s stock.
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5fabd84f-ba3d-4aaf-b17a-534edfe307fa
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727752.0
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2019-10-14 00:00:00 UTC
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6 Safe Dividend Stocks to Buy Now
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DEO
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https://www.nasdaq.com/articles/6-safe-dividend-stocks-to-buy-now-2019-10-14
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nan
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nan
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[Editor’s note: “6 Safe Dividend Stocks to Buy Now” was previously published in September 2019. It has since been updated to include the most relevant information available.]
From continuing concerns about the China-U.S. trade war to worries about the yield curve inversion, the stock market still faces many steep risks.
America’s political situation hasn’t been this tense in decades. The EU is facing a host of challenges, and there’s always volatility lurking somewhere.
Add it all up, and things could easily get volatile quite soon. That leaves investors wondering where they can go for safety.
After years of tech outperforming everything, the problems facing Apple (NASDAQ: ), Facebook (NASDAQ:), and Amazon (NASDAQ:) have many people bailing on those stocks as well.
That leaves safe-haven stocks as a more favorable alternative. Here are six worth taking a look at.
Diageo (DEO)
Dividend Yield: 2.10%
Rain or shine, good economy or bad, people like to drink alcohol. And for , that makes Diageo (NYSE:) an ideal play. While its name may not be familiar, its brands almost certainly are. Diageo owns and manufactures Guinness beer, Captain Morgan rum, Smirnoff vodka and Johnnie Walker whiskey, among many others.
Source:
DEO stock is a well-known safe haven for investors. The company is headquartered in the U.K. and was one of the very few stocks to go up the day after Brexit in that country as British investors sold risky stocks and moved to safety. Diageo will again serve as a safe haven whenever the next bear market/recession hits.
Diageo isn’t just a great business, it’s also a great dividend play. The company has continuously raised its dividend (as measured in its home currency of British Pounds) each of the past 20 years.
Campbell Soup (CPB)
Dividend Yield: 3%
Campbell Soup (NYSE:) is one of the unloved packaged-foods makers. It’s not hard to see why, if you only think about the company’s name. Canned soup certainly isn’t trendy with younger consumers at this point. And there’s a general nutritional wariness about heavily salted foods.
Source: Shutterstock
That said, there’s much more to Campbell Soup than just the iconic red cans. The company is more and more a snack food play. As we know, while Americans profess an interest in healthier eating, they still love their junk food from time to time. Campbell’s, owner of Hanover, Pop Secret, Goldfish and Pepperidge Farm, is in a great position to profit off of this.
Pepsico (NYSE:), the leader in snacks, consistently gets a high P/E ratio from the market, as investors acknowledge the stickiness of their brands with consumers. The market, however, is not appreciating Campbell Soup as much. Shares are down from $50 in 2017 to $47 now.
PacWest Bancorp (PACW)
Dividend Yield: 6.6%
After investors dumped bank stocks late last year, a lot of value has been created in this generally overlooked sector of the market, where solid dividends abound.
Source: Shutterstock
That brings us to PacWest Bancorp (NASDAQ:), which offers a more-than 6% dividend yield at the moment. Headquartered in Los Angeles, PacWest is a major player throughout the California market and currently sports a $4 billion market cap. That puts it in a sweet spot, size-wise, where it may still be a buyout candidate, but it is large enough to manage the rising costs of regulation and banking technology costs.
Despite the horrid state of the California housing market in 2008, PacWest survived the crisis. In fact, its shares never came close to zero during the panic. The bank has come out stronger, and is now generating record profits. Thanks to the corporate tax cuts in particular, PACW stock is now at a cheap P/E ratio of just 9.4 times its trailing earnings.
New York Community Bancorp (NYCB)
Dividend Yield: 5.22%
Despite its large yield, New York Community Bancorp (NASDAQ:) is an even safer bank stock. NYCB stock currently yields 5.2%, and they earn more than enough to cover the dividend, with earnings coming in at around 79 cents and dividends at 68 cents annually.
NYCB stock was down 12% last year because the sector was down, as discussed above. Over the last few months, though, it has fought its way back to the levels it traded at before the fall. That’s why the bank is one of the safest in the country. It lends primarily against multi-family homes in New York City, one of the lowest-risk lending markets out there.
The bank’s loans barely budged in performance even during 2008. With a strong dividend covered out of earnings and a safe loan book, investors can earn a large dividend income from a most conservative bank.
Southern Co (SO)
Dividend Yield: 4%
In the worst of times, people tend to still want to use electricity. Even a severe economic downturn tends to not impact utility stocks too dramatically. As such, it’s a sound sector to buy when investors get panicky, such as what we’re seeing with the market now.
Source:
Southern Co (NYSE:), as one of the highest-yielding large power utilities, checks the boxes for safe dividend stocks here. SO stock is currently yielding 4%.
Its high yield is in large part, it seems, due to interest rates having gone up. Many investors treat utility stocks as substitutes for bonds. As such, when interest rates go up, investors demand a higher yield from their utility stock as well. If interest rates were to keep surging for years to come, SO stock would likely underperform. Right now, though, that clearly is not the case.
Exxon Mobil (XOM)
Dividend Yield: 5%
Speaking of things people use in good times and bad, gasoline ranks pretty high on the list. Sure there is a minor drop-off in consumption during recessions, as people take fewer road trips, for example, but in general, oil and gas is a safe haven business. And Exxon Mobil (NYSE:) as the largest U.S. player is a true sleep-well-at-night stock.
Source:
The combination of a fortress balance sheet, diversified operations and a storied dividend make XOM stock an excellent place to endure market storms. It may seem strange to call Exxon diversified. But what many investors don’t realize is that much of big oil has spun off the other segments of their businesses.
We saw a ton of refining and pipelines subsidiaries moved out of the parent companies into MLPs and other corporate entities. That is all well and good as far as shareholder value maximization goes. But Exxon’s more diversified approach ensures that it remains solidly profitable even when the price of oil plummets, as it did in recent years.
XOM stock is hardly the most exciting name in a high-growth market. But at 16.7 times earnings and paying a 5% dividend yield, it is a fine option for defensive investors. And buyers are still getting a fair value at this point.
At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock. You can reach him on Twitter at @irbezek.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (DEO) Dividend Yield: 2.10% Rain or shine, good economy or bad, people like to drink alcohol. Source: DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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Diageo (DEO) Dividend Yield: 2.10% Rain or shine, good economy or bad, people like to drink alcohol. Source: DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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Diageo (DEO) Dividend Yield: 2.10% Rain or shine, good economy or bad, people like to drink alcohol. Source: DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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Diageo (DEO) Dividend Yield: 2.10% Rain or shine, good economy or bad, people like to drink alcohol. Source: DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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87bc5838-fe20-4197-aaa9-83da26d056e4
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727753.0
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2019-10-08 00:00:00 UTC
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3 Consumer Stocks to Buy and Hold
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DEO
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https://www.nasdaq.com/articles/3-consumer-stocks-to-buy-and-hold-2019-10-08
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nan
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nan
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October is already proving to be another volatile month in the markets, unnerving most investors. Therefore, I’d like to discuss three consumer stocks that I believe may be suitable for many long-term portfolios.
The stocks to buy include Costco (NASDAQ:), Diageo (NYSE:) and McDonald’s (NYSE:). Over the next several decades, the global population is expected to grow by at least a billion people. Therefore, when it comes to investing for the long run, following the consumer will likely offer stable returns for the average investor.
Meanwhile, if you are of the opinion that an economic slowdown may be almost upon us, you may want to reconsider your portfolio diversification strategies. Certain industries and stocks tend to do better in times of slower economic growth. A healthy starting point is looking at companies with a track record of success that will still be in-demand in the future. In the coming weeks, we can possibly expect price choppiness in , DEO and stock, too. But any profit-taking in these stocks could be a sign to investors to consider buying into the shares.
With all of that in mind, lets dive a little deeper into each of these consumer stocks and determine what exactly makes them ideal stocks to buy now.
Consumer Stocks to Buy: Costco (COST)
Source: Helen89 / Shutterstock.com
Notable tailwind catalysts: Defensive stock, straightforward annual membership business model and
Expected price range until next earnings in January: $270-$290
If you believe in holding shares for the long term, I’d suggest that you take a closer look at Costco, the second-largest global retailer by revenue. Costco operates in the warehouse club (or wholesale club) space within the retail industry.
Due to the low-cost and high-value products offered by warehouse clubs, this sector usually performs well regardless of macroeconomic conditions.
Costco runs on a subscription business model, whereby customers pay an annual membership fee to have access to its bargain-priced bulk goods. By using a membership-only system, COST stock is able to book nearly all of its profits one year in advance.
Revenue is a direct function of the number of members it has. In other words, the annual membership model contributes to its operating income and gives Costco stock immense earnings stability.
Year-to-date, COST stock is up about 41%.
However, on Oct.4, Costco stock reported mixed . The group achieved $47.50 billion in revenue, just shy of Wall Street’s expectation of $47.57 billion.
On the other hand, net income was $1.09 million, or $2.47 a share, compared to the $1.04 million, or $2.36 per share a year prior.
Therefore, there may be some profit taking in the shares in the short-run. But such a decline would offer a better entry point for investors.
Diageo (DEO)
Source: Shutterstock
Notable tailwind catalysts: Strong brands, global diversification and dividend
Expected price range until next earnings in January: $145-$165
With its , Diageo shares offer long-term growth potential. Such geographic diversification — especially into emerging economies, where consumers are increasingly showing brand loyalty — provides a relatively defensive investment opportunity.
In a , Jean-Marie Cardebat and Linda Jiao of University of Bordeaux in France discuss the increasing consumption levels of alcohol, especially wine, in emerging markets.
The strong brand names of Diageo contribute to increased volume growth in most markets and gives management pricing and competitive power within this non-cyclical market. The group has over 200 strong brands, including Baileys, Don Julio, Guinness, Johnnie Walker and Smirnoff.
In July, DEO stock delivered robust organic net sales growth of 6.1%. Organic operating profit also increased by 9%. Africa, Latin America and Asia Pacific regions all contributed strongly to the results.
Year-to-date, Diageo share price is up about 14%.
Public health warnings against and higher taxes on alcohol in many jurisdictions are headwinds for alcohol companies. Yet Diageo is continually growing revenues and the company’s fundamental story remains intact.
McDonald’s (MCD)
Source: 8th.creator / Shutterstock.com
Notable tailwind catalysts: Global brand recognition, rental income portfolio and dividend yield
Expected price range until next earnings in October: $200-$210
McDonald’s operates in the fragmented food service industry. Its competitors include Restaurant Brands International (NYSE:), Starbucks (NASDAQ:) and Yum Brands (NYSE:). It has over 36,000 restaurants in over 100 countries.
On July 26, McDonald’s reported mixed . Yet in recent quarters, in addition to the acceleration of U.S. sales, MCD stock has benefited from international growth, mostly thanks to promotions, mixed-priced deals as well as renovated stores.
Over 90% of the restaurants are currently franchised. The franchising business gives McDonald’s a significant as the initial franchise fees and on-going royalties mean high margins. Its operating margins now stand around a healthy 30%. Franchisees carry the operating costs and business risks. Thus McDonald’s does not have to worry about the expenses of running those operations.
The group — globally recognized as “the Golden Arches” — also from the franchisees. The company owns most of the properties where the restaurants operate. Then it leases those out to the franchisees, often at significant markups. It may not be wrong to say that the company is in the real estate business as much as food services.
As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In the coming weeks, we can possibly expect price choppiness in , DEO and stock, too. Diageo (DEO) Source: Shutterstock Notable tailwind catalysts: Strong brands, global diversification and dividend Expected price range until next earnings in January: $145-$165 With its , Diageo shares offer long-term growth potential. In July, DEO stock delivered robust organic net sales growth of 6.1%.
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Diageo (DEO) Source: Shutterstock Notable tailwind catalysts: Strong brands, global diversification and dividend Expected price range until next earnings in January: $145-$165 With its , Diageo shares offer long-term growth potential. In the coming weeks, we can possibly expect price choppiness in , DEO and stock, too. In July, DEO stock delivered robust organic net sales growth of 6.1%.
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Diageo (DEO) Source: Shutterstock Notable tailwind catalysts: Strong brands, global diversification and dividend Expected price range until next earnings in January: $145-$165 With its , Diageo shares offer long-term growth potential. In the coming weeks, we can possibly expect price choppiness in , DEO and stock, too. In July, DEO stock delivered robust organic net sales growth of 6.1%.
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In the coming weeks, we can possibly expect price choppiness in , DEO and stock, too. Diageo (DEO) Source: Shutterstock Notable tailwind catalysts: Strong brands, global diversification and dividend Expected price range until next earnings in January: $145-$165 With its , Diageo shares offer long-term growth potential. In July, DEO stock delivered robust organic net sales growth of 6.1%.
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52b7f408-db74-470d-9501-6a2c31040906
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727754.0
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2019-10-08 00:00:00 UTC
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Diageo: Here’s Why the Stock Jumped 18% In A Year
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DEO
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https://www.nasdaq.com/articles/diageo%3A-heres-why-the-stock-jumped-18-in-a-year-2019-10-08
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nan
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nan
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Diageo (NYSE: DEO) saw its stock price increase from $139 in September 2018 to $164 in September 2019, marking a rise of ~18% in a year. This increase was driven by expectations of revenue growth of 2.2% for the FY2018-FY2020 period (despite a marginal decline in revenues during FY2019), net income margin growth of 3.6% due to productivity gains, P/E multiple growth of 10.7% during the same period due to rising revenue and successful cost mitigation strategies, along with a 3.4% drop in number of shares outstanding. Additionally, management’s efforts to enhance shareholder returns, in the form of higher dividend per share and expansion in share buyback program, have also lifted investor sentiment, which is reflecting in the stock price rise.
You can view the Trefis interactive dashboard – What Led To 18% Rise In Diageo’s Stock Price In 2019? – to better understand how various drivers behind the stock price rise have moved. In addition, here is more Consumer Staples data.
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Diageo (NYSE: DEO) saw its stock price increase from $139 in September 2018 to $164 in September 2019, marking a rise of ~18% in a year. This increase was driven by expectations of revenue growth of 2.2% for the FY2018-FY2020 period (despite a marginal decline in revenues during FY2019), net income margin growth of 3.6% due to productivity gains, P/E multiple growth of 10.7% during the same period due to rising revenue and successful cost mitigation strategies, along with a 3.4% drop in number of shares outstanding. Additionally, management’s efforts to enhance shareholder returns, in the form of higher dividend per share and expansion in share buyback program, have also lifted investor sentiment, which is reflecting in the stock price rise.
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Diageo (NYSE: DEO) saw its stock price increase from $139 in September 2018 to $164 in September 2019, marking a rise of ~18% in a year. This increase was driven by expectations of revenue growth of 2.2% for the FY2018-FY2020 period (despite a marginal decline in revenues during FY2019), net income margin growth of 3.6% due to productivity gains, P/E multiple growth of 10.7% during the same period due to rising revenue and successful cost mitigation strategies, along with a 3.4% drop in number of shares outstanding. Additionally, management’s efforts to enhance shareholder returns, in the form of higher dividend per share and expansion in share buyback program, have also lifted investor sentiment, which is reflecting in the stock price rise.
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Diageo (NYSE: DEO) saw its stock price increase from $139 in September 2018 to $164 in September 2019, marking a rise of ~18% in a year. This increase was driven by expectations of revenue growth of 2.2% for the FY2018-FY2020 period (despite a marginal decline in revenues during FY2019), net income margin growth of 3.6% due to productivity gains, P/E multiple growth of 10.7% during the same period due to rising revenue and successful cost mitigation strategies, along with a 3.4% drop in number of shares outstanding. Additionally, management’s efforts to enhance shareholder returns, in the form of higher dividend per share and expansion in share buyback program, have also lifted investor sentiment, which is reflecting in the stock price rise.
|
Diageo (NYSE: DEO) saw its stock price increase from $139 in September 2018 to $164 in September 2019, marking a rise of ~18% in a year. This increase was driven by expectations of revenue growth of 2.2% for the FY2018-FY2020 period (despite a marginal decline in revenues during FY2019), net income margin growth of 3.6% due to productivity gains, P/E multiple growth of 10.7% during the same period due to rising revenue and successful cost mitigation strategies, along with a 3.4% drop in number of shares outstanding. Additionally, management’s efforts to enhance shareholder returns, in the form of higher dividend per share and expansion in share buyback program, have also lifted investor sentiment, which is reflecting in the stock price rise.
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fdac7a46-a9e3-4cb6-ae8a-32d42487ea19
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727755.0
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2019-10-01 00:00:00 UTC
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Consumer Sector Update for 10/01/2019: MKC, WPP, DEO, WMT, MCD, DIS, CVS, KO
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DEO
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https://www.nasdaq.com/articles/consumer-sector-update-for-10-01-2019%3A-mkc-wpp-deo-wmt-mcd-dis-cvs-ko-2019-10-01
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nan
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nan
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Top Consumer Stocks:
WMT: +0.27%
MCD: -1.43%
DIS: +0.33%
CVS: Flat
KO: -0.15%
Leading consumer stocks were mixed pre-bell Tuesday.
In other sector news:
(+) McCormick (MKC) was more than 2% higher as it reported Q3 adjusted earnings of $1.46 per share, up from $1.28 in the same period a year ago and topping the estimate of $1.29 from analysts polled by Capital IQ.
(+) WPP (WPP) was marginally gaining after it named John Rogers as the company's chief financial officer, succeeding Paul Richardson early next year.
(-) Diageo (DEO) was declining as it launched and priced $1.6 billion fixed rate dollar-denominated bonds less than a month after warning the group wasn't "immune from significant changes to global trade policy."
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(-) Diageo (DEO) was declining as it launched and priced $1.6 billion fixed rate dollar-denominated bonds less than a month after warning the group wasn't "immune from significant changes to global trade policy." In other sector news: (+) McCormick (MKC) was more than 2% higher as it reported Q3 adjusted earnings of $1.46 per share, up from $1.28 in the same period a year ago and topping the estimate of $1.29 from analysts polled by Capital IQ. (+) WPP (WPP) was marginally gaining after it named John Rogers as the company's chief financial officer, succeeding Paul Richardson early next year.
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(-) Diageo (DEO) was declining as it launched and priced $1.6 billion fixed rate dollar-denominated bonds less than a month after warning the group wasn't "immune from significant changes to global trade policy." Top Consumer Stocks: Leading consumer stocks were mixed pre-bell Tuesday.
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(-) Diageo (DEO) was declining as it launched and priced $1.6 billion fixed rate dollar-denominated bonds less than a month after warning the group wasn't "immune from significant changes to global trade policy." In other sector news: (+) McCormick (MKC) was more than 2% higher as it reported Q3 adjusted earnings of $1.46 per share, up from $1.28 in the same period a year ago and topping the estimate of $1.29 from analysts polled by Capital IQ. (+) WPP (WPP) was marginally gaining after it named John Rogers as the company's chief financial officer, succeeding Paul Richardson early next year.
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(-) Diageo (DEO) was declining as it launched and priced $1.6 billion fixed rate dollar-denominated bonds less than a month after warning the group wasn't "immune from significant changes to global trade policy." Top Consumer Stocks: CVS: Flat
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befb3c2e-06a6-415d-abb1-c9df835ad510
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727756.0
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2019-10-01 00:00:00 UTC
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Diageo Prices Two-tranche Fixed Rate Bonds - Quick Facts
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DEO
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https://www.nasdaq.com/articles/diageo-prices-two-tranche-fixed-rate-bonds-quick-facts-2019-10-01
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nan
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nan
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(RTTNews) - Diageo plc (DGE.L, DEO) launched a SEC-registered bond offering scheduled to settle on 3 October 2019. The Group will use the proceeds for general corporate purposes. Citigroup, Deutsche Bank, HSBC, Morgan Stanley and Nomura acted as joint active book-running managers.
The $1.6 billion bond offering consists of $1 billion 2.375% fixed rate notes due 2029; and $600 million 2.125% fixed rate notes due 2024. The issuer of the bonds is Diageo Capital plc, with payment of principal and interest unconditionally guaranteed by Diageo plc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Diageo plc (DGE.L, DEO) launched a SEC-registered bond offering scheduled to settle on 3 October 2019. Citigroup, Deutsche Bank, HSBC, Morgan Stanley and Nomura acted as joint active book-running managers. The $1.6 billion bond offering consists of $1 billion 2.375% fixed rate notes due 2029; and $600 million 2.125% fixed rate notes due 2024.
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(RTTNews) - Diageo plc (DGE.L, DEO) launched a SEC-registered bond offering scheduled to settle on 3 October 2019. The $1.6 billion bond offering consists of $1 billion 2.375% fixed rate notes due 2029; and $600 million 2.125% fixed rate notes due 2024. The issuer of the bonds is Diageo Capital plc, with payment of principal and interest unconditionally guaranteed by Diageo plc.
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(RTTNews) - Diageo plc (DGE.L, DEO) launched a SEC-registered bond offering scheduled to settle on 3 October 2019. The $1.6 billion bond offering consists of $1 billion 2.375% fixed rate notes due 2029; and $600 million 2.125% fixed rate notes due 2024. The issuer of the bonds is Diageo Capital plc, with payment of principal and interest unconditionally guaranteed by Diageo plc.
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(RTTNews) - Diageo plc (DGE.L, DEO) launched a SEC-registered bond offering scheduled to settle on 3 October 2019. The Group will use the proceeds for general corporate purposes. Citigroup, Deutsche Bank, HSBC, Morgan Stanley and Nomura acted as joint active book-running managers.
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a72b456d-b5c7-42ea-89f4-11ea1fc79527
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727757.0
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2019-09-25 00:00:00 UTC
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DEO Makes Notable Cross Below Critical Moving Average
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DEO
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https://www.nasdaq.com/articles/deo-makes-notable-cross-below-critical-moving-average-2019-09-25
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nan
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nan
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In trading on Wednesday, shares of Diageo plc (Symbol: DEO) crossed below their 200 day moving average of $161.09, changing hands as low as $160.10 per share. Diageo plc shares are currently trading off about 1.2% on the day. The chart below shows the one year performance of DEO shares, versus its 200 day moving average:
Looking at the chart above, DEO's low point in its 52 week range is $131.43 per share, with $176.22 as the 52 week high point — that compares with a last trade of $160.25.
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In trading on Wednesday, shares of Diageo plc (Symbol: DEO) crossed below their 200 day moving average of $161.09, changing hands as low as $160.10 per share. The chart below shows the one year performance of DEO shares, versus its 200 day moving average: Looking at the chart above, DEO's low point in its 52 week range is $131.43 per share, with $176.22 as the 52 week high point — that compares with a last trade of $160.25. Diageo plc shares are currently trading off about 1.2% on the day.
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In trading on Wednesday, shares of Diageo plc (Symbol: DEO) crossed below their 200 day moving average of $161.09, changing hands as low as $160.10 per share. The chart below shows the one year performance of DEO shares, versus its 200 day moving average: Looking at the chart above, DEO's low point in its 52 week range is $131.43 per share, with $176.22 as the 52 week high point — that compares with a last trade of $160.25. Diageo plc shares are currently trading off about 1.2% on the day.
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In trading on Wednesday, shares of Diageo plc (Symbol: DEO) crossed below their 200 day moving average of $161.09, changing hands as low as $160.10 per share. The chart below shows the one year performance of DEO shares, versus its 200 day moving average: Looking at the chart above, DEO's low point in its 52 week range is $131.43 per share, with $176.22 as the 52 week high point — that compares with a last trade of $160.25. Diageo plc shares are currently trading off about 1.2% on the day.
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In trading on Wednesday, shares of Diageo plc (Symbol: DEO) crossed below their 200 day moving average of $161.09, changing hands as low as $160.10 per share. The chart below shows the one year performance of DEO shares, versus its 200 day moving average: Looking at the chart above, DEO's low point in its 52 week range is $131.43 per share, with $176.22 as the 52 week high point — that compares with a last trade of $160.25. Diageo plc shares are currently trading off about 1.2% on the day.
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e5430182-fddb-460e-90ab-72adc58e49c1
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727758.0
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2019-09-19 00:00:00 UTC
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Stock Market News: AT&T Mulls a DIRECTV Move; Diageo Faces Trade Challenges
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DEO
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https://www.nasdaq.com/articles/stock-market-news%3A-att-mulls-a-directv-move-diageo-faces-trade-challenges-2019-09-19
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nan
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nan
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Thursday morning brought modest gains for major benchmarks as investors took more time to consider the impact of the Federal Reserve's decision yesterday to cut interest rates by a quarter percentage point. Positive economic data helped improve market sentiment, and many hope that the Fed's move will prevent a recession and help foster greater growth in the near future. As of 10:30 a.m. EDT, the Dow Jones Industrial Average (DJINDICES: ^DJI) was up 91 points to 27,238. The S&P 500 (SNPINDEX: ^GSPC) gained 12 points to 3,019, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) picked up 54 points to 8,231.
Even with today's gains, businesses are still struggling to come up with the best strategies to maximize their prospects. AT&T (NYSE: T) is once again in the spotlight as investors try to guess whether it'll make a major strategic move with its DIRECTV satellite video business. Meanwhile, Diageo (NYSE: DEO) gave a warning about the current state of global trade that suggests there are still reasons for concern across the broader stock market.
Is AT&T dealing DIRECTV?
Shares of AT&T were up about 1% in response to renewed reports that the telecom giant might be looking at a major strategic move involving its DIRECTV business. The possible outcome could be a sale or spinoff of DIRECTV -- something that could help to boost its share price, at least according to activist investors.
Image source: AT&T.
Hedge fund Elliott Management said earlier this month that it sees AT&T shares as being greatly undervalued, and it took a stab at explaining why. One criticism of the telecom company was that because of its massive purchases of DIRECTV and Time Warner, AT&T had taken on too much at the same time, distracting it from its core business. Given the opportunities in building out an upgraded 5G wireless network, Elliott urged AT&T to take steps to refocus its efforts on its most promising business.
Selling off DIRECTV could be a step in that direction if AT&T chooses to do so. Proceeds from a sale would allow the telecom company to pay down some of its debt or provide additional capital for network improvements. It would also take away the company's exposure to a declining market, as many DIRECTV customers have moved to cheaper streaming video services. With Elliott likely pushing for such a move, it'll be interesting to see whether AT&T pulls the trigger on a DIRECTV deal -- and whether it makes further efforts toward appeasing its new activist shareholder.
Diageo tries to stay upbeat
Spirits producer Diageo saw its stock rise a fraction of a percent Thursday morning. The company behind Guinness beer and Smirnoff vodka gave an update on the prospects for its business in the immediate future, and it remained confident despite rising challenges on the trade front.
Diageo said that it anticipates it will still be able to produce organic sales growth in a range of 4% to 6% for the full year. It also expects that its results for the first half of the fiscal year will see operating profit grow at a slightly slower rate than sales, although that's largely due to tough comparisons against the prior-year period's results.
Yet trade concerns remain an issue for the spirits maker. CEO Ivan Menezes urged investors not to assume that Diageo doesn't have to worry about trade considerations, and he tried to assure shareholders that his team will keep monitoring such matters closely.
Even so, Diageo's at the center of many major issues, including both the U.K.'s Brexit separation from the European Union and possible tensions involving the U.S. market. With ongoing challenges in navigating shifting consumer preferences with respect to alcoholic beverages, Diageo has a lot to balance in order to keep itself moving in the right direction.
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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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AT&T (NYSE: T) is once again in the spotlight as investors try to guess whether it'll make a major strategic move with its DIRECTV satellite video business. Meanwhile, Diageo (NYSE: DEO) gave a warning about the current state of global trade that suggests there are still reasons for concern across the broader stock market. It would also take away the company's exposure to a declining market, as many DIRECTV customers have moved to cheaper streaming video services.
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AT&T (NYSE: T) is once again in the spotlight as investors try to guess whether it'll make a major strategic move with its DIRECTV satellite video business. Meanwhile, Diageo (NYSE: DEO) gave a warning about the current state of global trade that suggests there are still reasons for concern across the broader stock market. It would also take away the company's exposure to a declining market, as many DIRECTV customers have moved to cheaper streaming video services.
|
AT&T (NYSE: T) is once again in the spotlight as investors try to guess whether it'll make a major strategic move with its DIRECTV satellite video business. Meanwhile, Diageo (NYSE: DEO) gave a warning about the current state of global trade that suggests there are still reasons for concern across the broader stock market. It would also take away the company's exposure to a declining market, as many DIRECTV customers have moved to cheaper streaming video services.
|
AT&T (NYSE: T) is once again in the spotlight as investors try to guess whether it'll make a major strategic move with its DIRECTV satellite video business. Meanwhile, Diageo (NYSE: DEO) gave a warning about the current state of global trade that suggests there are still reasons for concern across the broader stock market. It would also take away the company's exposure to a declining market, as many DIRECTV customers have moved to cheaper streaming video services.
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727759.0
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2019-09-17 00:00:00 UTC
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Is Diageo a Buy?
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DEO
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https://www.nasdaq.com/articles/is-diageo-a-buy-2019-09-17
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nan
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nan
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Diageo (NYSE: DEO) owns some of the most valuable drinking brands in the industry, including Johnnie Walker, Guinness, Smirnoff, Captain Morgan, and Crown Royal. These brands have delivered market-beating gains for investors with Diageo stock nearly tripling the return of the S&P 500 over the last 20 years. However, in the last decade, the stock has performed roughly in line with the broad market.
The stock currently trades for a forward P/E of 23 times analysts' earnings estimates, representing a premium to the average consumer staples stock. Let's look at why Diageo deserves to trade at that premium, and what kind of return investors can expect from here.
IMAGE SOURCE: DIAGEO.
Power brands
Diageo owns six out of the top 10 alcohol brands in the world, according to Brand Finance. For a company logging nearly $16 billion of revenue in the past year, it can be a challenging feat to find growth, especially considering the stable trends of alcohol consumption per capita over the last century across spirits, beer, and wine.
To drive returns for investors, Diageo has relied on acquisitions and innovation. Diageo started in 1997 as a result of the merger between Grand Metropolitan and Guinness. After shedding its food brands in 2000 (including Burger King) to focus on the premium drinks market, Diageo acquired two big names -- Crown Royal and Captain Morgan -- and the company has been an active dealmaker ever since.
In the past five years, Diageo has acquired brands like Don Julio and Casamigos -- two leading tequila plays where the company has seen some of its most promising results. The company has also been able to grow earnings faster than revenue by improving operating efficiency and profit margins.
Data by YCharts.
Another opportunity for growth lies in market share gains. The alcohol industry is highly fragmented, which provides an opportunity for a consumer staples giant like Diageo to expand its piece of the pie. Diageo controlled just 25% of global spirits sales volume as of March 2016.
The company is trying to increase its market share by introducing new products, which management refers to as "new-world" brands. The company seeds new brands either through its in-house development program or externally through Distilled Ventures.
The latter effort has created several new innovations, such as Seedlip -- the first nonalcoholic spirit. The importance of new drinks like Seedlip is that it can help Diageo take advantage of shifting consumer tastes. For example, in fiscal 2018, Diageo acquired a Distilled Ventures brand called Belsazar, which positions the company to participate in the growing demand for aperitifs -- a special concoction that has been around for a long time but is starting to see rising popularity with younger consumers.
Diageo and other beverage companies view low-alcohol drinks as a long-term growth opportunity. Last year, aperitif sales grew 7.4%, while vodka, brandy, and rum all declined, according to market research firm IWSR.
Diageo is worth a premium
The growth in aperitifs and decline in vodka highlights a risk for Diageo -- that changes in consumption patterns can limit the company's growth potential in any given year.
It's difficult to predict what consumers may like in the distant future, but that's where Diageo's diversification and ability to invest in new brands is such a significant advantage. Even with a 6% decline in industrywide vodka sales last year, which makes up a tenth of Diageo's business, the company still generated 5% growth in organic net sales. Some of that growth was also driven by price increases, which is a testament to the strength of the labels in its global portfolio.
Spirits and other beverages, excluding beer and wine, made up 69% of Diageo's net sales in fiscal 2018, and this exposure should continue to drive steady top-line growth. Although total alcohol consumption has remained stable for many years, spirits have been taking share from beer and wine, and there has also been a strong trend toward premium drinks. Last quarter, Diageo saw double-digit growth in sales of gin and reserve spirits, which management credited toward its innovation and the premiumization trend spreading around the world.
But don't expect market-beating returns
This industry leader should continue to deliver returns for investors, as long as the trend toward spirits and premiumization continues. The company is actively trying to win more consumers over to spirits through increased spending on marketing while at the same time expanding its profitability.
However, I don't expect investor returns to be any better than the last 10 years, as the stock already sports a high P/E ratio relative to its underlying growth assumptions. The drinks giant is not likely to grow revenue and profits beyond the single-digit range. Management's current medium-term guidance calls for mid-single-digit growth in revenue and 5% to 7% growth in operating profit. It's possible the company may be able to grow earnings per share faster than operating income, depending on the extent of management's share repurchase program. The stock also pays a dividend with a yield of 2.6% as of this writing to pad investors' annual return.
Diageo is a classic "defensive" stock. While investors won't hit a home run, people like to have a drink no matter the state of the economy, and many of the drinks people enjoy are made by brands within the Diageo family.
10 stocks we like better than Diageo
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Diageo wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 1, 2019
John Ballard has no position in any of the stocks mentioned. The Motley Fool recommends Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (NYSE: DEO) owns some of the most valuable drinking brands in the industry, including Johnnie Walker, Guinness, Smirnoff, Captain Morgan, and Crown Royal. For a company logging nearly $16 billion of revenue in the past year, it can be a challenging feat to find growth, especially considering the stable trends of alcohol consumption per capita over the last century across spirits, beer, and wine. After shedding its food brands in 2000 (including Burger King) to focus on the premium drinks market, Diageo acquired two big names -- Crown Royal and Captain Morgan -- and the company has been an active dealmaker ever since.
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Diageo (NYSE: DEO) owns some of the most valuable drinking brands in the industry, including Johnnie Walker, Guinness, Smirnoff, Captain Morgan, and Crown Royal. After shedding its food brands in 2000 (including Burger King) to focus on the premium drinks market, Diageo acquired two big names -- Crown Royal and Captain Morgan -- and the company has been an active dealmaker ever since. For example, in fiscal 2018, Diageo acquired a Distilled Ventures brand called Belsazar, which positions the company to participate in the growing demand for aperitifs -- a special concoction that has been around for a long time but is starting to see rising popularity with younger consumers.
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Diageo (NYSE: DEO) owns some of the most valuable drinking brands in the industry, including Johnnie Walker, Guinness, Smirnoff, Captain Morgan, and Crown Royal. These brands have delivered market-beating gains for investors with Diageo stock nearly tripling the return of the S&P 500 over the last 20 years. After shedding its food brands in 2000 (including Burger King) to focus on the premium drinks market, Diageo acquired two big names -- Crown Royal and Captain Morgan -- and the company has been an active dealmaker ever since.
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Diageo (NYSE: DEO) owns some of the most valuable drinking brands in the industry, including Johnnie Walker, Guinness, Smirnoff, Captain Morgan, and Crown Royal. These brands have delivered market-beating gains for investors with Diageo stock nearly tripling the return of the S&P 500 over the last 20 years. The company is actively trying to win more consumers over to spirits through increased spending on marketing while at the same time expanding its profitability.
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fe5a55f0-e286-485d-8e13-cbe349c8a6e1
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727760.0
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2019-09-10 00:00:00 UTC
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How Much Is Anheuser-Busch InBev’s Deleveraging Program Expected To Add To Its EPS?
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DEO
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https://www.nasdaq.com/articles/how-much-is-anheuser-busch-inbevs-deleveraging-program-expected-to-add-to-its-eps-2019-09
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nan
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nan
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Anheuser-Busch InBev (NYSE: BUD) is expected to see a $30 billion cumulative reduction in its total debt by 2020, from its highs of 2016. At this stage it would be interesting for the investors to know how much are they gaining out of the company’s focus on reducing debt.
Overview
Anheurser-Buch InBev saw its debt burden increase from $49.5 billion in 2015 to $122.6 billion in 2016, primarily due to additional debt raised to fund the $100 billion-plus SABMiller acquisition.
However, the management has redirected its efforts to reducing the outstanding debt to boost margins, enhance shareholder returns, and have a sustainable balance sheet.
Trefis estimates that the projected decrease in debt could lead to an additional net income of $721 million and an incremental EPS of $0.36, over the next two years.
You can view the Trefis interactive dashboard – Impact of Anheuser-Busch InBev’s Debt Reduction Initiatives On Its EPS – and alter the assumptions to arrive at your own estimates for the company’s debt, interest expense, and EPS. In addition, here is more Consumer Staples data.
Improving Cash Flow
BUD’s cash flow from operations has increased from $16 billion in 2016 to $21.6 billion in 2018, driven by a corresponding rise in revenue base and improving margins.
Operating cash flow is expected to improve further in the near term, as the company benefits from increased premiumization of its brands leading to higher revenue, while also seeing further improvement in profitability.
The company’s efforts at reducing cost have also been successful with it refinancing a large portion of its high-interest debt instruments, at a lower interest rate currently. For example: New bond issuance of $15.5 billion in February 2019, to pay off its existing higher interest debt, is expected to contribute to growth in the company’s bottom line.
Interest Savings Of $0.72 Billion Due To Lower Debt
Post the SABMiller deal in 2016, BUD has been able to reduce debt by about $12 billion in two years, with the company’s total debt standing at $110 billion at the end of 2018.
Interest expense of $4.14 billion in 2018 was 3.8% of the total debt for the year.
With the company mentioning that deleveraging would be its primary focus in the near term, we believe that the reduction in debt over the next two years would be greater than the previous two.
Thus, if total debt falls to $90 billion by 2020, even at the same interest expense ratio (3.8%), interest expense would decrease from $4.14 billion in 2018 to $3.42 billion in 2020, marking a decline of $0.72 billion or 17.4%.
Reduction of $0.72 billion in interest would be a corresponding increase in the net income over the next two years.
Incremental EPS of $0.36
Outstanding shares at 1.98 billion would translate this additional net income of $0.72 billion into an incremental earnings per share of $0.36
Conclusion
Trefis analysis shows that the success of this deleveraging program would provide BUD’s shareholders with better returns in the form of incremental EPS of $0.36.
On the completion of the program, BUD has indicated that it will now focus on other methods of rewarding its investors, probably through a higher dividend, which has been curtailed currently to ensure more resources are available for debt repayment.
A better balance sheet position, lower leverage, and enhanced shareholder returns are likely to help support the company’s stock price growth.
What’s behind Trefis? See How it’s Powering New Collaboration and What-Ifs
For CFOs and Finance Teams | Product, R&D, and Marketing Teams
More Trefis Data
Like our charts? Explore example interactive dashboards and create your own.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The company’s efforts at reducing cost have also been successful with it refinancing a large portion of its high-interest debt instruments, at a lower interest rate currently. For example: New bond issuance of $15.5 billion in February 2019, to pay off its existing higher interest debt, is expected to contribute to growth in the company’s bottom line. On the completion of the program, BUD has indicated that it will now focus on other methods of rewarding its investors, probably through a higher dividend, which has been curtailed currently to ensure more resources are available for debt repayment.
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However, the management has redirected its efforts to reducing the outstanding debt to boost margins, enhance shareholder returns, and have a sustainable balance sheet. Improving Cash Flow BUD’s cash flow from operations has increased from $16 billion in 2016 to $21.6 billion in 2018, driven by a corresponding rise in revenue base and improving margins. Incremental EPS of $0.36 Outstanding shares at 1.98 billion would translate this additional net income of $0.72 billion into an incremental earnings per share of $0.36 Conclusion Trefis analysis shows that the success of this deleveraging program would provide BUD’s shareholders with better returns in the form of incremental EPS of $0.36.
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You can view the Trefis interactive dashboard – Impact of Anheuser-Busch InBev’s Debt Reduction Initiatives On Its EPS – and alter the assumptions to arrive at your own estimates for the company’s debt, interest expense, and EPS. Interest Savings Of $0.72 Billion Due To Lower Debt Post the SABMiller deal in 2016, BUD has been able to reduce debt by about $12 billion in two years, with the company’s total debt standing at $110 billion at the end of 2018. Thus, if total debt falls to $90 billion by 2020, even at the same interest expense ratio (3.8%), interest expense would decrease from $4.14 billion in 2018 to $3.42 billion in 2020, marking a decline of $0.72 billion or 17.4%.
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You can view the Trefis interactive dashboard – Impact of Anheuser-Busch InBev’s Debt Reduction Initiatives On Its EPS – and alter the assumptions to arrive at your own estimates for the company’s debt, interest expense, and EPS. Interest Savings Of $0.72 Billion Due To Lower Debt Post the SABMiller deal in 2016, BUD has been able to reduce debt by about $12 billion in two years, with the company’s total debt standing at $110 billion at the end of 2018. Reduction of $0.72 billion in interest would be a corresponding increase in the net income over the next two years.
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8d18d1a1-73b5-4995-9775-51fe24aac1fd
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727761.0
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2019-09-06 00:00:00 UTC
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10 Buy-and-Hold Stocks to Own Forever
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DEO
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https://www.nasdaq.com/articles/10-buy-and-hold-stocks-to-own-forever-2019-09-06
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nan
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nan
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[Editor’s note: This story was previously published in August 2019. It has since been updated and republished.]
Investing to “buy and hold” is trickier than it looks. The increasing pace of technological change means even the most successful, dominant companies have to continually adapt to keep up. Industries like energy, real estate and even consumer products are facing potentially significant long-term changes going forward.
In any era, amassing a collection of retirement stocks simply by buying the best companies and holding them for years can be a risky endeavor.
General Motors (NYSE:) was a classic “widows and orphans” stock until the last decade when GM wound up going bankrupt. GM shares basically haven’t moved in a quarter of a century. United States Steel (NYSE:) once was a pillar of corporate America and a buy-and-hold stock. Polaroid and Eastman Kodak were once blue-chip stocks. Both went bankrupt as cameras changed from film to digital.
But there still are stocks to buy and hold out there that can last forever, while offering dividend income along the way.
Here are ten such retirement stocks to buy and hold forever.
Bank of America (BAC)
Source: Tero Vesalainen / Shutterstock.com
Dividend Yield: 2.56%
It might seem strange to open the list with Bank of America (NYSE:). After all, we’re only a bit more than a decade on from the financial crisis.
During that crisis, BofA acquisition Countrywide Financial blew up in spectacular fashion, after pioneering many of the risky tactics that led to the bubble and subsequent bust.
But this is a different BofA.
Net consumer charge-offs hit a decade-long low last year. Its performance on credit metrics is strong. Government regulations have been criticized as slowing growth — but they’ve undoubtedly lowered risk as well, even if observers might argue that a better balance is needed.
No less than , through his Berkshire Hathaway Inc. (NYSE:, NYSE:BRK.B). And the Oracle of Omaha is fond of saying that his favorite holding period is “forever.”
That seems likely true for BAC stock as well.
Diageo (DEO)
Dividend Yield: 2.07%
Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by Diageo (NYSE:) are well-positioned to adapt to shifting tastes.
Diageo owns classic brands like Johnnie Walker whiskey, Tanqueray gin, Smirnoff vodka, and Harp and Guinness beer, among many others. What most have in common is a timeless quality and worldwide brand recognition.
As a result, while beverage giants like Coca-Cola (NYSE:) and Anheuser Busch InBev (NYSE:) have struggled with earnings growth, Diageo grew net income by 13.5% in fiscal 2018 and expects consistent growth going forward.
Yet with a trailing multiple of 26.5, and with a dividend yield of 2%, Diageo stock isn’t all that dearly valued. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
Medtronic (MDT)
Source: JHVEPhoto / Shutterstock.com
Dividend Yield: 2.11%
In this day and age, the U.S. healthcare market, in particular, seems potentially volatile. Concerns about increased spending and political battles over the Affordable Care Act create more questions than answers.
But even with that uncertainty, Medtronic (NYSE:) isn’t going anywhere. The company’s devices are an integral part of modern medicine, ranging from pacemakers to stents to bone grafts to imaging systems.
Even the risks involved in the sector look priced into MDT. Medtronic’s days of double-digit annual growth may well be behind it, but it’s not finished increasing earnings or dividends. MDT stock likely isn’t finished rising, either.
NextEra Energy (NEE)
Source: Shutterstock
Dividend Yield: 2.27%
Utility stocks are among the most common safe, buy-and-hold stocks. NextEra Energy (NYSE:) is now the largest electric utility in the U.S. by market capitalization. That might actually be the only problem with NEE stock.
NextEra shares gained 24% year-to-date, and trades just off record highs. Potential valuation concerns aside, NextEra looks like a winner. It serves customers in the southern Florida region, still one of the nation’s fastest-growing areas.
A 22.6 forward P/E multiple is high for the space but not outlandishly so. And a 2.37% dividend yield provides income along the way.
Investors looking for value in the space might look for a smaller play like cheaper Dominion Energy (NYSE:). But it’s usually worth paying for quality, and NextEra Energy looks like one of the best utility stocks out there.
McCormick & Company (MKC)
Source: Shutterstock
Dividend Yield: 1.39%
McCormick & Company (NYSE:) is another quality company whose valuation might spook some investors. But MKC stock very rarely is offered cheaply.
The company’s market leadership in spices and seasonings provides both an impressive moat and protection against economic downturns. MKC stock did dip after the company sauce from Reckitt Benckiser (OTCMKTS:) at a price that looked a bit high to many investors. But MKC has recovered those gains and then some.
Top-line growth for McCormick likely isn’t going to be explosive, but it will be steady. The same has been true of MKC stock, which has returned an average of 13% a year over the past decade, including dividends.
With continuous cost-cutting initiatives, the contribution from the acquired brands and organic growth (and growth in organic products), MKC still should be able to provide double-digit annual returns going forward as well.
Allstate (ALL)
Source: Shutterstock
Dividend Yield: 1.92%
Allstate Corp (NYSE:) long has used the tagline, “You’re in good hands,” and it’s true for Allstate investors as well.
ALL stock has almost quadrupled from late-2011 lows. And there could be more upside to come. After all, Allstate isn’t particularly expensive, trading at a 14 P/E.
Once any short-term worries subside, ALL should resume its march upward.
International Flavors & Fragrances (IFF)
Source: Shutterstock
Dividend Yield: 2.62%
International Flavors & Fragrances (NYSE:) is a company most consumers encounter every day without knowing it and many investors aren’t exactly hip to it, either.
As its name suggests, the company develops flavors & fragrances across 13 categories, including cosmetics, perfumes, beverages and sweet flavors. Sales and earnings have increased consistently and so has IFF’s share price. At a 53 P/E, IFF does look a bit pricey. But, as with McCormick and other stocks on this list, investors should pay for quality.
IFF’s hidden, but key role, in so many industries, gives it a great deal of protection against both competition and macro factors. Acquisitions and a growing cosmetic additive business both provide room for growth.
Consumers may not know IFF, but investors should.
Lamb Weston (LW)
Source: Shutterstock
Dividend Yield: 1.11%
Lamb Weston (NYSE:) was spun off from Conagra Brands (NYSE:) last year. Lamb Weston is the No. 1 potato producer in the United States. In fact, it manufactures the well-known fries at McDonald’s (NYSE:), among other restaurant chains.
Lamb Weston also has a consumer business (including a small segment that manufactures frozen vegetables), while serving restaurants of all sizes. Health concerns might seem a long-term headwind against the business, but growth has been steady for years, and margins continue to improve.
LW is targeting international markets for growth, as French fries have much more limited penetration, while international audiences generally are intrigued by Americanized products.
Despite growth and leading market share, LW stock isn’t particularly cheap, trading at about 19 times next year’s earnings. The company did pick up a fair amount of debt in the CAG spinoff. But it’s paying that debt down, which should lower interest expense and boost cash flow going forward.
With many similar stocks trading at much higher multiples, LW seems to have room for upside. And international growth should offset any health-related concerns in the U.S., should they arise. America’s love affair with French fries isn’t going to suddenly end, and that should ensure years of stability for Lamb Weston at least.
Fortune Brands (FBHS)
Source: Shutterstock
Dividend Yield: 1.71%
Investors are commonly advised to diversify their portfolio. Fortune Brands Home & Security (NYSE:) has done just that.
The company operates in four segments: Cabinets, Plumbing, Doors, and Security. Among its well-known brands are Moen in plumbing, and MasterLock in security.
FBHS is more of a cyclical stock than most on this list, and the company no doubt has benefited from the steady if slow, housing recovery in the U.S.
But the company’s products also generate relatively stable replacement demand, and a 1.6% dividend yield provides modest, but growing, income.
Fortune Brands has been an impressive company since its founding and a solid stock since its 2011 IPO. There may be a bit more volatility here, but that’s a worthwhile price to pay for long-term investors. There’s enough value in Fortune Brands to ride out any market jitters.
Republic Services (RSG)
Source: Shutterstock
Dividend Yield: 1.82%
Republic Services (NYSE:) is a bit smaller and likely a lot less well-known than rival Waste Management (NYSE:). But in this case, that’s not necessarily a bad thing.
Republic Services has outgrown its larger competitor in both sales and earnings over the past five years. RSG stock has modestly outperformed WM over the same period as well. Investors appear to believe that will continue, as Republic Services is valued a bit higher than Waste Management, at least based on forward earnings multiples.
Both RSG and WM are solid long-term plays. Contracted revenue and steady demand should support both companies for years to come. There’s room for further acquisitions in a relatively fragmented space. Republic Services gets the nod here due to slightly better growth and more room for margin improvement.
But investors looking for safe, stable growth can’t go wrong with either RSG or WM.
As of this writing, Vince Martin was long MKC.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (DEO) Dividend Yield: 2.07% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. During that crisis, BofA acquisition Countrywide Financial blew up in spectacular fashion, after pioneering many of the risky tactics that led to the bubble and subsequent bust.
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Diageo (DEO) Dividend Yield: 2.07% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. International Flavors & Fragrances (IFF) Source: Shutterstock Dividend Yield: 2.62% International Flavors & Fragrances (NYSE:) is a company most consumers encounter every day without knowing it and many investors aren’t exactly hip to it, either.
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Diageo (DEO) Dividend Yield: 2.07% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. McCormick & Company (MKC) Source: Shutterstock Dividend Yield: 1.39% McCormick & Company (NYSE:) is another quality company whose valuation might spook some investors.
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Diageo (DEO) Dividend Yield: 2.07% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. NextEra Energy (NEE) Source: Shutterstock Dividend Yield: 2.27% Utility stocks are among the most common safe, buy-and-hold stocks.
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727762.0
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2019-09-06 00:00:00 UTC
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Boston Beer's Hard Seltzer Is Experiencing Potent Sales Growth
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DEO
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https://www.nasdaq.com/articles/boston-beers-hard-seltzer-is-experiencing-potent-sales-growth-2019-09-06
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nan
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nan
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When Boston Beer (NYSE: SAM) CMO Lesya Lysyj describes the growth of her company's hard seltzer brand as being "like a runaway train," it's not just marketing hyperbole: During each week of this past summer, the brewer sold more of its Truly brand than it did during the entirety of summer 2017, Lysyj toldfinancial newssite Cheddar. Sales in the category as a whole, she says, have tripled.
Moreover, the alcoholic beverage has become more than just a light summer drink. While Boston Beer anticipated it would just be a seasonal niche beverage, it instead found sales remained elevated all through last winter. And the brewer recently reported its sixth consecutive quarter of rising depletions (sales to distributors and retailers) because of hard seltzer's strength.
Image source: Boston Beer.
Its popularity actually even hurt the brewer a little last quarter, because it needed to use third-party contract brewers to meet the demand, The company had to hire temporary labor to help load all of the shipments of Truly variety packs. Gross margins ended up falling 210 basis points because of those added expenses.
At 29% market share, Boston Beer's Truly is the second-biggest hard seltzer brand behind White Claw, which has a 54% share. But their surging sales are attracting more competition -- other brewers want a piece of what looks like a new beverage category with staying power.
Welcome to the big leagues
Perhaps the biggest concern for Boston Beer and White Claw is Anheuser-Busch InBev (NYSE: BUD) turning its attention to this market. The industry giant secured its Bon & Viv brand as the official hard seltzer of the National Football League, and it just introduced a second version under the Natural Light beer brand that will offer 6% alcohol by volume, compared to White Claw and Truly's 5%, while costing less than those brands.
With its vast distribution network, the megabrewer can ensure its products are the ones consumers see most prominently every time they enter a liquor store. Although Bon & Viv has only around 7% of the hard seltzer market, a renewed marketing campaign and budget could quickly tilt the field in its favor.
Nor is Anheuser-Busch the only beverage giant that wants in. Molson Coors' MillerCoors division has its Henry's Hard Sparkling Water; Constellation Brands' Corona recently introduced Refresca, a "premium spiked refresher"; Diageo launched Smirnoff Spiked Sparkling Seltzer; and Pabst Brewing, which may have redefined a category of its own with its Pabst Hard Coffee, is coming out with Pabst Stronger Seltzer at an 8% ABV (but Four Loko may win the title of hardest hard seltzer with its 14% ABV Seltzer Sour).
Can Boston Beer maintain the pace?
There just may be enough room for all of those brands to thrive in the marketplace, considering hard seltzer's tremendous growth rate. White Claw's sales volumes in 2018 surged by 289%, according to data from IWSR Drinks Market Analysis, and Truly was hard on its heels with 278% growth.
Moreover, unlike wine coolers, spritzers, and other light alcoholic fare, hard seltzer has not been categorized by consumers as a feminine drink -- it's equally popular among men. And Anheuser-Busch's move to secure Bon & Viv's sponsorship deal with the NFL will only expand its already broad appeal.
But Boston Beer investors need to consider whether hard seltzer's runaway train will wind up derailing the company's growth trajectory. More intense competition from rivals offering lower prices and higher alcoholic contents could siphon away its customers, and tastes can change quickly in this industry. If Pabst Hard Coffee were being sold nationally and not in just a handful of states, it might be a huge seller too.
Hard seltzer isn't succumbing to the "boom splat" phenomenon that hard soda did, because its lack of excessive sugar appeals to more health-conscious drinkers. On the other hand, Boston Beer, which trades at 41 times forward earnings, is apparently priced based on the assumption that hard seltzer's torrid sales growth will continue.
The hard seltzer market still has upside potential, but industry followers should know that Boston Beer faces a tough road ahead if it wants to hold onto its piece of the market.
10 stocks we like better than Boston Beer
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Boston Beer wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 1, 2019
Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Boston Beer. The Motley Fool owns shares of Molson Coors Brewing. The Motley Fool recommends Anheuser-Busch InBev NV, Constellation Brands, and Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Welcome to the big leagues Perhaps the biggest concern for Boston Beer and White Claw is Anheuser-Busch InBev (NYSE: BUD) turning its attention to this market. Moreover, unlike wine coolers, spritzers, and other light alcoholic fare, hard seltzer has not been categorized by consumers as a feminine drink -- it's equally popular among men. On the other hand, Boston Beer, which trades at 41 times forward earnings, is apparently priced based on the assumption that hard seltzer's torrid sales growth will continue.
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Molson Coors' MillerCoors division has its Henry's Hard Sparkling Water; Constellation Brands' Corona recently introduced Refresca, a "premium spiked refresher"; Diageo launched Smirnoff Spiked Sparkling Seltzer; and Pabst Brewing, which may have redefined a category of its own with its Pabst Hard Coffee, is coming out with Pabst Stronger Seltzer at an 8% ABV (but Four Loko may win the title of hardest hard seltzer with its 14% ABV Seltzer Sour). The Motley Fool owns shares of Molson Coors Brewing. The Motley Fool recommends Anheuser-Busch InBev NV, Constellation Brands, and Diageo.
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When Boston Beer (NYSE: SAM) CMO Lesya Lysyj describes the growth of her company's hard seltzer brand as being "like a runaway train," it's not just marketing hyperbole: During each week of this past summer, the brewer sold more of its Truly brand than it did during the entirety of summer 2017, Lysyj toldfinancial newssite Cheddar. The industry giant secured its Bon & Viv brand as the official hard seltzer of the National Football League, and it just introduced a second version under the Natural Light beer brand that will offer 6% alcohol by volume, compared to White Claw and Truly's 5%, while costing less than those brands. Molson Coors' MillerCoors division has its Henry's Hard Sparkling Water; Constellation Brands' Corona recently introduced Refresca, a "premium spiked refresher"; Diageo launched Smirnoff Spiked Sparkling Seltzer; and Pabst Brewing, which may have redefined a category of its own with its Pabst Hard Coffee, is coming out with Pabst Stronger Seltzer at an 8% ABV (but Four Loko may win the title of hardest hard seltzer with its 14% ABV Seltzer Sour).
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At 29% market share, Boston Beer's Truly is the second-biggest hard seltzer brand behind White Claw, which has a 54% share. But their surging sales are attracting more competition -- other brewers want a piece of what looks like a new beverage category with staying power. The industry giant secured its Bon & Viv brand as the official hard seltzer of the National Football League, and it just introduced a second version under the Natural Light beer brand that will offer 6% alcohol by volume, compared to White Claw and Truly's 5%, while costing less than those brands.
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720a4c16-7c07-401d-bbad-fe2eec84654d
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727763.0
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2019-09-05 00:00:00 UTC
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6 Safe Dividend Stocks to Buy Now
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DEO
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https://www.nasdaq.com/articles/6-safe-dividend-stocks-to-buy-now-2019-09-05
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nan
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[Editor’s note: “6 Safe Dividend Stocks to Buy Now” was previously published in June 2019. It has since been updated to include the most relevant information available.]
From continuing concerns about the China-U.S. trade war to worries about the yield curve inversion, the stock market still faces many steep risks.
America’s political situation hasn’t been this tense in decades. The EU is facing a host of challenges, and there’s always volatility lurking somewhere.
Add it all up, and things could easily get volatile quite soon. That leaves investors wondering where they can go for safety.
After years of tech outperforming everything, the problems facing Apple (NASDAQ: ), Facebook (NASDAQ:), and Amazon (NASDAQ:) have many people bailing on those stocks as well.
That leaves safe-haven stocks as a more favorable alternative. Here are six worth taking a look at.
Diageo (DEO)
Dividend Yield: 2.00%
Rain or shine, good economy or bad, people like to drink alcohol. And for , that makes Diageo (NYSE:) an ideal play. While its name may not be familiar, its brands almost certainly are. Diageo owns and manufactures Guinness beer, Captain Morgan rum, Smirnoff vodka and Johnnie Walker whiskey, among many others.
Source:
DEO stock is a well-known safe haven for investors. The company is headquartered in the U.K. and was one of the very few stocks to go up the day after Brexit in that country as British investors sold risky stocks and moved to safety. Diageo will again serve as a safe haven whenever the next bear market/recession hits.
Diageo isn’t just a great business, it’s also a great dividend play. The company has continuously raised its dividend (as measured in its home currency of British Pounds) each of the past 20 years.
Campbell Soup (CPB)
Dividend Yield: 3.1%
Campbell Soup (NYSE:) is one of the unloved packaged-foods makers. It’s not hard to see why, if you only think about the company’s name. Canned soup certainly isn’t trendy with younger consumers at this point. And there’s a general nutritional wariness about heavily salted foods.
Source: Shutterstock
That said, there’s much more to Campbell Soup than just the iconic red cans. The company is more and more a snack food play. As we know, while Americans profess an interest in healthier eating, they still love their junk food from time to time. Campbell’s, owner of Hanover, Pop Secret, Goldfish and Pepperidge Farm, is in a great position to profit off of this.
Pepsico (NYSE:), the leader in snacks, consistently gets a high P/E ratio from the market, as investors acknowledge the stickiness of their brands with consumers. The market, however, is not appreciating Campbell Soup as much. Shares are down from $50 in 2017 to $45 now.
PacWest Bancorp (PACW)
Dividend Yield: 7.15%
After investors dumped bank stocks late last year, a lot of value has been created in this generally overlooked sector of the market, where solid dividends abound.
Source: Shutterstock
That brings us to PacWest Bancorp (NASDAQ:), which offers a more-than 7% dividend yield at the moment. Headquartered in Los Angeles, PacWest is a major player throughout the California market and currently sports a $4 billion market cap. That puts it in a sweet spot, size-wise, where it may still be a buyout candidate, but it is large enough to manage the rising costs of regulation and banking technology costs.
Despite the horrid state of the California housing market in 2008, PacWest survived the crisis. In fact, its shares never came close to zero during the panic. The bank has come out stronger, and is now generating record profits. Thanks to the corporate tax cuts in particular, PACW stock is now at a cheap P/E ratio of just 8.7 times its trailing earnings.
New York Community Bancorp (NYCB)
Dividend Yield: 8.61%
Despite its large yield, New York Community Bancorp (NASDAQ:) is an even safer bank stock. NYCB stock currently yields 8.61%, and they earn more than enough to cover the dividend, with earnings coming in at around 79 cents and dividends at 68 cents annually.
NYCB stock was down 12% last year because the sector was down, as discussed above. Over the last few months, though, it has fought its way back to the levels it traded at before the fall. That’s why the bank is one of the safest in the country. It lends primarily against multi-family homes in New York City, one of the lowest-risk lending markets out there.
The bank’s loans barely budged in performance even during 2008. With a strong dividend covered out of earnings and a safe loan book, investors can earn a large dividend income from a most conservative bank.
Southern Co (SO)
Dividend Yield: 4.13%
In the worst of times, people tend to still want to use electricity. Even a severe economic downturn tends to not impact utility stocks too dramatically. As such, it’s a sound sector to buy when investors get panicky, such as what we’re seeing with the market now.
Source:
Southern Co (NYSE:), as one of the highest-yielding large power utilities, checks the boxes for safe dividend stocks here. SO stock is currently yielding more than 4%.
Its high yield is in large part, it seems, due to interest rates having gone up. Many investors treat utility stocks as substitutes for bonds. As such, when interest rates go up, investors demand a higher yield from their utility stock as well. If interest rates were to keep surging for years to come, SO stock would likely underperform. Right now, though, that clearly is not the case.
Exxon Mobil (XOM)
Dividend Yield: 5%
Speaking of things people use in good times and bad, gasoline ranks pretty high on the list. Sure there is a minor drop-off in consumption during recessions, as people take fewer road trips, for example, but in general, oil and gas is a safe haven business. And Exxon Mobil (NYSE:) as the largest U.S. player is a true sleep-well-at-night stock.
Source:
The combination of a fortress balance sheet, diversified operations and a storied dividend make XOM stock an excellent place to endure market storms. It may seem strange to call Exxon diversified. But what many investors don’t realize is that much of big oil has spun off the other segments of their businesses.
We saw a ton of refining and pipelines subsidiaries moved out of the parent companies into MLPs and other corporate entities. That is all well and good as far as shareholder value maximization goes. But Exxon’s more diversified approach ensures that it remains solidly profitable even when the price of oil plummets, as it did in recent years.
XOM stock is hardly the most exciting name in a high-growth market. But at 16.7 times earnings and paying a 4% dividend yield, it is a fine option for defensive investors. And buyers are still getting a fair value at this point.
At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock. You can reach him on Twitter at @irbezek.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (DEO) Dividend Yield: 2.00% Rain or shine, good economy or bad, people like to drink alcohol. Source: DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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Diageo (DEO) Dividend Yield: 2.00% Rain or shine, good economy or bad, people like to drink alcohol. Source: DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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Diageo (DEO) Dividend Yield: 2.00% Rain or shine, good economy or bad, people like to drink alcohol. Source: DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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Diageo (DEO) Dividend Yield: 2.00% Rain or shine, good economy or bad, people like to drink alcohol. Source: DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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26370e68-a3db-4845-a5e5-d1fcc587b35e
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727764.0
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2019-08-19 00:00:00 UTC
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Why I’m Still Bullish on Canopy Growth Stock for the Cannabis Long Term
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DEO
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https://www.nasdaq.com/articles/why-im-still-bullish-on-canopy-growth-stock-for-the-cannabis-long-term-2019-08-19
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nan
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nan
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There’s no sugarcoating the truth here. It has been an awful few weeks for pot stocks, particularly the cannabis market leader, Canopy Growth (NYSE:). At the end of April, CGC stock was flying high above $50 – up 90% year-to-date, as investors were getting excited about Canopy’s potential entry into the what-will-be-huge U.S. cannabis market. Two bad earnings reports later, the stock has come crashing down.
Source: Shutterstock
Today, CGC stock trades hands below $30 – nearly 50% off its late April highs, and up just 5% year-to-date, versus a 90% year-to-date gain back in April.
If that’s not a crash, I don’t know what is. Indeed, the crash has been so bad that some bulls have .
I get it. Stomaching a 50% crash over four months is not an easy thing to do. It does leave one feeling somewhat hopeless, dejected, and unwilling to double down.
But, that’s exactly what I’m doing here — doubling down. Investors have to see the forest for the trees here. All this near-term volatility is just noise. Who really cares if Canopy grew sales by 200% or 250% last quarter? Or if gross margins were 20% or 25%? All that really matters is that Canopy continues to position itself as the profitable leader in what will one day be a multi-hundred billion dollar global cannabis market.
Canopy is doing just that, and because they are, there is still visibility for Canopy to one day be a $50 to 100 billion company. CGC stock has a market cap of under $10 billion today. Thus, the long-term investment implication is simple: buy on weakness and hold for the long haul.
Early Innings for Pot’s Global Growth
When it comes to CGC stock, investors need to see the big picture here and if they don’t want to do that, they probably shouldn’t even be looking at the cannabis space at all.
The big picture here is that you have a cannabis industry that is in the top of the first inning of a multi-year, global growth narrative. Only one major developed economy has fully legalized cannabis (Canada), where it has been fully legal for less than a year, and that economy is considered one of the smaller fish in theglobal market Judging the long-term fate of a cannabis company because they missed sales or earnings estimates last quarter seems … foolish.
Doing so would be focusing on a tree. Instead, investors need to take a step back, and look at the forest. Here’s what the cannabis forest looks like. There is an overwhelming amount of data out there which implies that cannabis consumption is: on a secular ; nearly as pervasive as alcohol and tobacco consumption; and, in many instances, preferred to alcohol consumption among .
At the same time, governments around the world are becoming open to consideration of cannabis as a “safe drug” and are gradually progressing toward full legalization. Combining those two observations, the implication is clear: the global cannabis market will be fully legal one day, and when that happens, it will be huge — like global alcohol and tobacco markets huge.
Canopy Growth Stock Still Projects as a Long-Term Winner
The global alcohol and tobacco markets are several hundred billion dollar to trillion dollar markets. The cannabis market will be that big one day.
Each of those markets has also produced several $50 billion to $100 billion-plus companies. See Anheuser-Busch (NYSE:), Diageo (NYSE:), or Heineken (OTCQX:) in the alcohol world. See Altria (NYSE:) and Philip Morris (NYSE:) in the tobacco world.
The cannabis market will similarly produce several $50 to $100 billion-plus companies at scale. Canopy Growth will be one of them.
Even the company’s former CEO, Bruce Linton, unceremoniously booted out last month as Canopy’s co-CEO and board chair, he was a buyer of CGC stock after the shares fell on August 15.
Right now, Canopy is the biggest cannabis company in the fully legal Canadian market. It also has the largest balance sheet, with the most cash firepower to increase , expand global distribution, penetrate other cannabis markets, and invest in next-gen product R&D — overall, sustaining and expanding its leadership position.
Canopy is doing all of those things. The company’s harvest amounted to more than 40,000 kilograms last quarter — no one else in this space even comes close to touching that number. Canopy has a deal to acquire Acreage once the U.S. market becomes fully legal, giving the company a clear pathway to penetrating the U.S. market. They also poured over C$8 billion into R&D last quarter. Competitor Tilray (NASDAQ:) spent less than $2 billion CAD ($1.5 billion) on R&D in the overlapping quarter.
In other words, Canopy is doing everything it needs to do in order to be the Anheuser-Bush or Altria of the cannabis world. Big picture, that means CGC stock remains on track to have a $50 billion to $100 billion-plus market cap one day. The market cap today? Under $10 billion. For long-term investors who are willing to ride out the volatility, the implication is clear: buy on weakness and hold for the long haul.
Bottom Line on CGC Stock
When it comes to CGC stock, investors need to see the forest for the trees.
True, it has a caretaker CEO after Linton Constellation Brands (NYSE:), but there are indications that Canopy is looking at candidates from the consumer, pharmaceutical, alcohol and even technology sectors, according to BNN Bloomberg.
But put that aside for a minute. As well, forget today’s depressed gross margins. They are depressed because Canopy is spending an arm and a leg to lay the foundation for long-term growth. Forget today’s slowing growth trends. Growth is slowing because Canopy is more focused on maximizing long-term growth, not supercharging near-term improvements.
Instead, understand that Canopy is laying the groundwork to become a $50 billion to $100 billion-plus company one day.
I get that it’s tough to do that on the heels of a 50% sell-off over the past four months. But, CGC stock is still up 5% since January 2019, 20% since January 2018, and 300% since January 2017. So, again, the best thing here is to zoom out and contextualize everything.
When you do that, it becomes clear that Canopy is still a winning company, and that CGC stock still has tremendous long term potential.
As of this writing, Luke Lango was long CGC.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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At the end of April, CGC stock was flying high above $50 – up 90% year-to-date, as investors were getting excited about Canopy’s potential entry into the what-will-be-huge U.S. cannabis market. Even the company’s former CEO, Bruce Linton, unceremoniously booted out last month as Canopy’s co-CEO and board chair, he was a buyer of CGC stock after the shares fell on August 15. True, it has a caretaker CEO after Linton Constellation Brands (NYSE:), but there are indications that Canopy is looking at candidates from the consumer, pharmaceutical, alcohol and even technology sectors, according to BNN Bloomberg.
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It has been an awful few weeks for pot stocks, particularly the cannabis market leader, Canopy Growth (NYSE:). Combining those two observations, the implication is clear: the global cannabis market will be fully legal one day, and when that happens, it will be huge — like global alcohol and tobacco markets huge. Canopy Growth Stock Still Projects as a Long-Term Winner The global alcohol and tobacco markets are several hundred billion dollar to trillion dollar markets.
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At the end of April, CGC stock was flying high above $50 – up 90% year-to-date, as investors were getting excited about Canopy’s potential entry into the what-will-be-huge U.S. cannabis market. Combining those two observations, the implication is clear: the global cannabis market will be fully legal one day, and when that happens, it will be huge — like global alcohol and tobacco markets huge. Canopy Growth Stock Still Projects as a Long-Term Winner The global alcohol and tobacco markets are several hundred billion dollar to trillion dollar markets.
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Stomaching a 50% crash over four months is not an easy thing to do. CGC stock has a market cap of under $10 billion today. Bottom Line on CGC Stock When it comes to CGC stock, investors need to see the forest for the trees.
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5b5c8ad4-3feb-437b-9412-6fb7d199f314
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727765.0
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2019-08-07 00:00:00 UTC
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Diageo plc (DEO) Ex-Dividend Date Scheduled for August 08, 2019
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DEO
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https://www.nasdaq.com/articles/diageo-plc-deo-ex-dividend-date-scheduled-for-august-08-2019-2019-08-07
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nan
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nan
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Diageo plc (DEO) will begin trading ex-dividend on August 08, 2019. A cash dividend payment of $2.111 per share is scheduled to be paid on October 08, 2019. Shareholders who purchased DEO prior to the ex-dividend date are eligible for the cash dividend payment. This represents an 55.91% increase over prior dividend payment.
The previous trading day's last sale of DEO was $163.74, representing a -7% decrease from the 52 week high of $176.07 and a 24.58% increase over the 52 week low of $131.43.
DEO is a part of the Consumer Non-Durables sector, which includes companies such as Coca-Cola Company (KO) and Anheuser-Busch Inbev SA (BUD). Zacks Investment Research reports DEO's forecasted earnings growth in 2020 as 6.42%, compared to an industry average of 2.4%.
For more information on the declaration, record and payment dates, visit the DEO Dividend History page. Our Dividend Calendar has the full list of stocks that have an ex-dividend today.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Shareholders who purchased DEO prior to the ex-dividend date are eligible for the cash dividend payment. Zacks Investment Research reports DEO's forecasted earnings growth in 2020 as 6.42%, compared to an industry average of 2.4%. For more information on the declaration, record and payment dates, visit the DEO Dividend History page.
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Shareholders who purchased DEO prior to the ex-dividend date are eligible for the cash dividend payment. Diageo plc (DEO) will begin trading ex-dividend on August 08, 2019. The previous trading day's last sale of DEO was $163.74, representing a -7% decrease from the 52 week high of $176.07 and a 24.58% increase over the 52 week low of $131.43.
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Shareholders who purchased DEO prior to the ex-dividend date are eligible for the cash dividend payment. The previous trading day's last sale of DEO was $163.74, representing a -7% decrease from the 52 week high of $176.07 and a 24.58% increase over the 52 week low of $131.43. For more information on the declaration, record and payment dates, visit the DEO Dividend History page.
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Diageo plc (DEO) will begin trading ex-dividend on August 08, 2019. Shareholders who purchased DEO prior to the ex-dividend date are eligible for the cash dividend payment. The previous trading day's last sale of DEO was $163.74, representing a -7% decrease from the 52 week high of $176.07 and a 24.58% increase over the 52 week low of $131.43.
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cee3490c-dedd-4b40-b714-129e718fc8a7
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727766.0
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2019-08-02 00:00:00 UTC
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Diageo Benefits From Rising Spirit Prices
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DEO
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https://www.nasdaq.com/articles/diageo-benefits-from-rising-spirit-prices-2019-08-02
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nan
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nan
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Diageo (NYSE: DEO) saw a steady rise in spirit sales across the board in fiscal 2019, and that's driving steady improvement on the bottom line. Tequila continues to be the outperformer, but sales for spirits across the board were strong.
Here's a look at the highlights from the year and what management expects for the future.
Image source: Getty Images.
Diageo: The raw numbers
Data source: Diageo. *In pounds. As of Aug. 2, 1 pound = $1.21.
What happened with Diageo this quarter?
The headline numbers are solid, but to understand what's going on in the business, we need to dig into the sale of spirits themselves and where they're popular. The highlights from the year are below.
Overall, volume was only up 2% in the quarter, led by a 5% increase in shipments to Asia-Pacific and offset by a 2% decline in Europe and Turkey.
Diageo's hottest spirit was tequila, which saw a 19% increase in volume and a 37% jump in reported sales. Gin volume was up 17%, with total sales up 23%. Rum was the one category that shrank, with volume and sales down 3% for the year.
On the product level, Diageo saw a 20% increase in Don Julio volume and a 32% increase in sales. Ketel One was up 10% in volume and 15% in sales. Bulleit was the other winner with an 11% increase in volume and 13% rise in sales. Ciroc vodka was the worst performer, with a 10% drop in volume and a 6% drop in sales.
One bright spot that has been consistent in the beer and spirits industry is growth of ready-to-drink beverages like Smirnoff Spiked Seltzer and Smirnoff Ice Smash. Diageo's volume was up 18% in the segment and reported sales were up 21%.
The dividend for fiscal 2019 was recommended at 68.6 pence, up 5% from a year ago.
The board of directors approved a plan to return 4.5 billion pounds ($5.5 billion) to shareholders in the fiscal 2020 to 2022 period.
What management had to say
Diageo's business is built around a number of powerful brands that have decades of staying power. That can make it tough to grow outside of those brands' lanes, which is why companies like Diageo will acquire growth brands like its $1 billion acquisition of Casamigos in 2017. CEO Ivan Menezes said the company is going to try to build those new brands in-house, which will take time: "Our capabilities around marketing investments continue to get stronger, and we see opportunities to invest, including behind new-to-world brands. These will take time to build, but will be an important part of our longer-term growth strategy."
If Diageo can keep growing the core business at a steady rate, it could boost long-term growth by building new brands organically.
Looking forward
Management expects mid single digit revenue growth in fiscal 2020, and that would be a solid result for the business. But the investment in new brands may lead to bottom-line growth that's a bit slower than we've come to expect, only exceeding sales growth by about a percentage point.
As long as name-brand spirits are growing in popularity worldwide, Diageo is well positioned to capture growth, and in 2019 the machine is working as well as investors can expect.
10 stocks we like better than Diageo
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Diageo wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 1, 2019
Travis Hoium has no position in any of the stocks mentioned. The Motley Fool recommends Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (NYSE: DEO) saw a steady rise in spirit sales across the board in fiscal 2019, and that's driving steady improvement on the bottom line. If Diageo can keep growing the core business at a steady rate, it could boost long-term growth by building new brands organically. Looking forward Management expects mid single digit revenue growth in fiscal 2020, and that would be a solid result for the business.
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Diageo (NYSE: DEO) saw a steady rise in spirit sales across the board in fiscal 2019, and that's driving steady improvement on the bottom line. The board of directors approved a plan to return 4.5 billion pounds ($5.5 billion) to shareholders in the fiscal 2020 to 2022 period. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.
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Diageo (NYSE: DEO) saw a steady rise in spirit sales across the board in fiscal 2019, and that's driving steady improvement on the bottom line. Diageo's hottest spirit was tequila, which saw a 19% increase in volume and a 37% jump in reported sales. On the product level, Diageo saw a 20% increase in Don Julio volume and a 32% increase in sales.
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Diageo (NYSE: DEO) saw a steady rise in spirit sales across the board in fiscal 2019, and that's driving steady improvement on the bottom line. Diageo's hottest spirit was tequila, which saw a 19% increase in volume and a 37% jump in reported sales. Ketel One was up 10% in volume and 15% in sales.
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3c7ec33d-f369-49cf-9c28-30a0cd2cb4c1
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727767.0
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2019-07-25 00:00:00 UTC
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RSI Alert: Diageo (DEO) Now Oversold
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DEO
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https://www.nasdaq.com/articles/rsi-alert%3A-diageo-deo-now-oversold-2019-07-25
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nan
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nan
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Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In trading on Thursday, shares of Diageo plc (Symbol: DEO) entered into oversold territory, hitting an RSI reading of 26.7, after changing hands as low as $162.98 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 64.1. A bullish investor could look at DEO's 26.7 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of DEO shares:
Looking at the chart above, DEO's low point in its 52 week range is $131.43 per share, with $176.0699 as the 52 week high point — that compares with a last trade of $162.74.
Find out what 9 other oversold stocks you need to know about »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In trading on Thursday, shares of Diageo plc (Symbol: DEO) entered into oversold territory, hitting an RSI reading of 26.7, after changing hands as low as $162.98 per share. A bullish investor could look at DEO's 26.7 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of DEO shares: Looking at the chart above, DEO's low point in its 52 week range is $131.43 per share, with $176.0699 as the 52 week high point — that compares with a last trade of $162.74.
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A bullish investor could look at DEO's 26.7 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of DEO shares: Looking at the chart above, DEO's low point in its 52 week range is $131.43 per share, with $176.0699 as the 52 week high point — that compares with a last trade of $162.74. In trading on Thursday, shares of Diageo plc (Symbol: DEO) entered into oversold territory, hitting an RSI reading of 26.7, after changing hands as low as $162.98 per share.
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In trading on Thursday, shares of Diageo plc (Symbol: DEO) entered into oversold territory, hitting an RSI reading of 26.7, after changing hands as low as $162.98 per share. A bullish investor could look at DEO's 26.7 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of DEO shares: Looking at the chart above, DEO's low point in its 52 week range is $131.43 per share, with $176.0699 as the 52 week high point — that compares with a last trade of $162.74.
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In trading on Thursday, shares of Diageo plc (Symbol: DEO) entered into oversold territory, hitting an RSI reading of 26.7, after changing hands as low as $162.98 per share. A bullish investor could look at DEO's 26.7 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. The chart below shows the one year performance of DEO shares: Looking at the chart above, DEO's low point in its 52 week range is $131.43 per share, with $176.0699 as the 52 week high point — that compares with a last trade of $162.74.
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5c78f4a2-1737-42e9-b60a-a9815a26ce52
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727768.0
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2019-07-25 00:00:00 UTC
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Diageo FY Pre-tax Profit Rises; To Return Up To GBP 4.5 Bln To Shareholders
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DEO
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https://www.nasdaq.com/articles/diageo-fy-pre-tax-profit-rises-to-return-up-to-gbp-4.5-bln-to-shareholders-2019-07-25
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(RTTNews) - Diageo PLC (DGE.L, DEO) on Thursday reported pre-tax profit of 4.24 billion pounds for the fiscal year ended 30 June 2019, up from 3.74 billion pounds in the prior year.
Profit attributable to equity shareholders of the parent company increased 5 percent to 3.16 billion pounds from 3.02 billion pounds last year. Basic earnings per share rose to 130.7 pence from 121.7 pence last year.
Operating profit before exceptional items grew 9 percent to 4.12 billion pounds from 3.82 billion pounds in the previous year. Earnings per share before exceptional items were 130.8 pence, compared to 118.6 pence a year ago.
Net sales for the year rose 6 percent to 12.87 billion pounds from 12.16 billion pounds last year. Organic growth was also 6 percent.
The company's board has approved plans for a further return of capital of up to 4.5 billion pounds to shareholders for the period from fiscal 2020 to fiscal year 2022.
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(RTTNews) - Diageo PLC (DGE.L, DEO) on Thursday reported pre-tax profit of 4.24 billion pounds for the fiscal year ended 30 June 2019, up from 3.74 billion pounds in the prior year. Profit attributable to equity shareholders of the parent company increased 5 percent to 3.16 billion pounds from 3.02 billion pounds last year. The company's board has approved plans for a further return of capital of up to 4.5 billion pounds to shareholders for the period from fiscal 2020 to fiscal year 2022.
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(RTTNews) - Diageo PLC (DGE.L, DEO) on Thursday reported pre-tax profit of 4.24 billion pounds for the fiscal year ended 30 June 2019, up from 3.74 billion pounds in the prior year. Profit attributable to equity shareholders of the parent company increased 5 percent to 3.16 billion pounds from 3.02 billion pounds last year. Operating profit before exceptional items grew 9 percent to 4.12 billion pounds from 3.82 billion pounds in the previous year.
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(RTTNews) - Diageo PLC (DGE.L, DEO) on Thursday reported pre-tax profit of 4.24 billion pounds for the fiscal year ended 30 June 2019, up from 3.74 billion pounds in the prior year. Operating profit before exceptional items grew 9 percent to 4.12 billion pounds from 3.82 billion pounds in the previous year. Net sales for the year rose 6 percent to 12.87 billion pounds from 12.16 billion pounds last year.
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(RTTNews) - Diageo PLC (DGE.L, DEO) on Thursday reported pre-tax profit of 4.24 billion pounds for the fiscal year ended 30 June 2019, up from 3.74 billion pounds in the prior year. Profit attributable to equity shareholders of the parent company increased 5 percent to 3.16 billion pounds from 3.02 billion pounds last year. Operating profit before exceptional items grew 9 percent to 4.12 billion pounds from 3.82 billion pounds in the previous year.
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4ad6d1be-fb5a-4995-999f-8c8b854b1d0b
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727769.0
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2019-07-11 00:00:00 UTC
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This Major Marijuana Grower Reiterates Its Desire to Find a Beverage Partner
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DEO
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https://www.nasdaq.com/articles/this-major-marijuana-grower-reiterates-its-desire-to-find-a-beverage-partner-2019-07-11
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nan
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nan
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The big day, for 2019 at least, is about five months away for Canadian marijuana stocks. After officially legalizing recreational marijuana on Oct. 17, 2018, Canada's regulatory agency Health Canada expects derivative products to first make their way onto dispensary-store shelves by mid-December. Derivatives are, for example, non-dried-flower products, such as vapes, edibles, topicals, concentrates, and nonalcoholic infused beverages.
Just as opening the door to the adult-use pool of consumers was viewed as a big deal for the Canadian pot industry, the ability to sell derivatives is expected to be a game changer. More than half of all cannabis products being purchased are currently oils, and derivatives have considerably higher long-term margin prospects relative to traditional dried flower. In short, derivatives are expected to fuel pot industry growth for many years to come.
Image source: Getty Images.
Marijuana stock to big beverage companies: Help wanted
Although every single major marijuana grower plans to diversify its product line to include some form of derivative products, not every grower has been as vocal as Atlantic-based grower OrganiGram Holdings (NASDAQ: OGI) about its desire to find an infused beverage partner.
Earlier this week, OrganiGram announced its intent to launch a dried powder formulation of cannabinoids -- including tetrahydrocannabinol (THC) and cannabidiol (CBD) -- in early 2020 in Canada. THC is the psychoactive cannabinoid that gets users high, while CBD is the nonpsychoactive cannabinoid best known for its perceived medical benefits.
This dried formulation can be added to any beverage of consumers' choosing, providing them the option of controlling their dose and experience. And since there's likely to be very little competition in the dried cannabinoid powder market, especially given OrganiGram's proprietary formulation that allows for more rapid onset of cannabinoid effects, it should have little issue generating healthy margins.
But the announcement of bringing a dried powder to market was only half the story. OrganiGram also intends to create a liquid beverage line with its nano-emulsion formulation, but it intends to seek out a partner to help with this process. The desire to find a partner should come as no surprise, since OrganiGram first announced its intent to seek out an established partner to help develop beverages for its faster-onset cannabinoid formulation back in April.
Image source: Getty Images.
Could these brand-name companies be the perfect infused-beverage partners for OrganiGram?
With derivatives not hitting the market for at least five more months, OrganiGram does have time to shop its product around. However, I do believe there are a few logical partnership opportunities at its disposal.
First, there's Diageo (NYSE: DEO), which, unlike Molson Coors Brewing, has shown little weakness in global alcohol demand. Sales for the first half of fiscal 2019, ended Dec. 31, 2018, showed 7.5% organic net sales growth and 3.5% organic volume growth, so it's not as if Diageo is hurting for growth catalysts. Nonetheless, the company has been rumored to be looking for a cannabis industry partner since last August. Since OrganiGram's formulation is unique, it should pique the interest of Diageo. And with deep pockets and plenty of branding appeal, Diageo would have little trouble marketing OrganiGram's infused beverage line in Canada.
A second possibility is Heineken (NASDAQOTH: HEINY), which is already involved in the infused beverage industry in California. Lagunitas, which is owned by Heineken, launched a cannabis-infused sparkling water line under the brand name Hi-Fi Hops in a few select locations in June 2018. These beverages were sold with either 10 mg of THC, or a hybrid of 5 mg each of THC and CBD. With a solid presence throughout North America, Heineken could look to OrganiGram, which is one of four marijuana growers to have supply deals with all of Canada's provinces, to further expand its reach.
Image source: Getty Images.
A third potential partner, but perhaps the biggest leap of all, is global beverage giant PepsiCo (NASDAQ: PEP). Coca-Cola announced last year that it would bow out of the cannabis beverage space, which presumably opens the door for PepsiCo to one-up Coca-Cola, which isn't something that happens all that often. The thing is, PepsiCo hasn't exactly committed to the marijuana space. Company executives have promised a hard look at the risks and rewards of entering the cannabis beverage arena, but have yet to fully commit or reserve themselves. Should PepsiCo take the risk and dive into infused beverages, the uniqueness of OrganiGram's formulation, coupled with PepsiCo's branding, could be a perfect match.
Keeping in mind that this is all purely speculation on my part, OrganiGram should have a number of solid brand-name beverage partners to choose from in the months that lie ahead.
Here's The Marijuana Stock You've Been Waiting For
A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.
And make no mistake – it is coming.
Cannabis legalization is sweeping over North America – 10 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.
And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.
Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.
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Learn more
Sean Williams has no position in any of the stocks mentioned. The Motley Fool owns shares of Molson Coors Brewing. The Motley Fool recommends Diageo and OrganiGram Holdings. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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First, there's Diageo (NYSE: DEO), which, unlike Molson Coors Brewing, has shown little weakness in global alcohol demand. Just as opening the door to the adult-use pool of consumers was viewed as a big deal for the Canadian pot industry, the ability to sell derivatives is expected to be a game changer. More than half of all cannabis products being purchased are currently oils, and derivatives have considerably higher long-term margin prospects relative to traditional dried flower.
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First, there's Diageo (NYSE: DEO), which, unlike Molson Coors Brewing, has shown little weakness in global alcohol demand. After officially legalizing recreational marijuana on Oct. 17, 2018, Canada's regulatory agency Health Canada expects derivative products to first make their way onto dispensary-store shelves by mid-December. Marijuana stock to big beverage companies: Help wanted Although every single major marijuana grower plans to diversify its product line to include some form of derivative products, not every grower has been as vocal as Atlantic-based grower OrganiGram Holdings (NASDAQ: OGI) about its desire to find an infused beverage partner.
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First, there's Diageo (NYSE: DEO), which, unlike Molson Coors Brewing, has shown little weakness in global alcohol demand. Marijuana stock to big beverage companies: Help wanted Although every single major marijuana grower plans to diversify its product line to include some form of derivative products, not every grower has been as vocal as Atlantic-based grower OrganiGram Holdings (NASDAQ: OGI) about its desire to find an infused beverage partner. The desire to find a partner should come as no surprise, since OrganiGram first announced its intent to seek out an established partner to help develop beverages for its faster-onset cannabinoid formulation back in April.
|
First, there's Diageo (NYSE: DEO), which, unlike Molson Coors Brewing, has shown little weakness in global alcohol demand. Just as opening the door to the adult-use pool of consumers was viewed as a big deal for the Canadian pot industry, the ability to sell derivatives is expected to be a game changer. Marijuana stock to big beverage companies: Help wanted Although every single major marijuana grower plans to diversify its product line to include some form of derivative products, not every grower has been as vocal as Atlantic-based grower OrganiGram Holdings (NASDAQ: OGI) about its desire to find an infused beverage partner.
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db8e8dc9-6a2b-478e-870c-7e08c3b90b50
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727770.0
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2019-07-05 00:00:00 UTC
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Consumer Sector Update for 07/05/2019: DEO, AMZN, GM, WMT, MCD, DIS, CVS, KO
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DEO
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https://www.nasdaq.com/articles/consumer-sector-update-for-07-05-2019%3A-deo-amzn-gm-wmt-mcd-dis-cvs-ko-2019-07-05
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Top Consumer Stocks:
WMT: -0.39%
MCD: -0.24%
DIS: -0.76%
CVS: Flat
KO: -0.36%
Leading consumer stocks were declining in Friday's pre-market trading.
In other sector news:
(-) Diageo (DEO) was more than 1% lower as the Press Trust of India reported that the company's Indian unit has requested the Central government to promote "ease of doing business" to encourage states to launch reforms for the alcoholic beverages industry.
(-) Britain's market competition watchdog is investigating the planned acquisition by eCommerce giant Amazon (AMZN) of a minority stake and certain rights in online food delivery service Deliveroo. Amazon was slightly lower in pre-market trading.
(=) General Motors (GM) was unchanged after saying it sold 753,926 vehicles in China in Q2, a 12.2% decline from sales of 858,344 units from last year.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In other sector news: (-) Diageo (DEO) was more than 1% lower as the Press Trust of India reported that the company's Indian unit has requested the Central government to promote "ease of doing business" to encourage states to launch reforms for the alcoholic beverages industry. (-) Britain's market competition watchdog is investigating the planned acquisition by eCommerce giant Amazon (AMZN) of a minority stake and certain rights in online food delivery service Deliveroo. (=) General Motors (GM) was unchanged after saying it sold 753,926 vehicles in China in Q2, a 12.2% decline from sales of 858,344 units from last year.
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In other sector news: (-) Diageo (DEO) was more than 1% lower as the Press Trust of India reported that the company's Indian unit has requested the Central government to promote "ease of doing business" to encourage states to launch reforms for the alcoholic beverages industry. Top Consumer Stocks: Leading consumer stocks were declining in Friday's pre-market trading.
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In other sector news: (-) Diageo (DEO) was more than 1% lower as the Press Trust of India reported that the company's Indian unit has requested the Central government to promote "ease of doing business" to encourage states to launch reforms for the alcoholic beverages industry. Leading consumer stocks were declining in Friday's pre-market trading. (-) Britain's market competition watchdog is investigating the planned acquisition by eCommerce giant Amazon (AMZN) of a minority stake and certain rights in online food delivery service Deliveroo.
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In other sector news: (-) Diageo (DEO) was more than 1% lower as the Press Trust of India reported that the company's Indian unit has requested the Central government to promote "ease of doing business" to encourage states to launch reforms for the alcoholic beverages industry. CVS: Flat Leading consumer stocks were declining in Friday's pre-market trading.
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7bbc8eee-8cfc-4324-84b8-a2917a6b579f
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727771.0
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2019-07-02 00:00:00 UTC
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3 Consumer Stocks Loading up on Marijuana
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DEO
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https://www.nasdaq.com/articles/3-consumer-stocks-loading-up-on-marijuana-2019-07-02
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nan
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There’s no denying that investing in marijuana stocks is one of the hottest trends in the entire market. With commercial legalization around the corner, many marijuana stocks are to bring forth new commercial and medical cannabis products. Canopy Growth’s (NYSE:) partnership with spirit maker Constellation Brands (NYSE:) was perhaps the most famous and largest of these deals.
However, CGC and STZ aren’t the only ones that have caught cannabis fever.
There are now several other big consumer firms looking at marijuana stocks for inspiration. As we have said before, these multinational firms are a safer bet on the growth of cannabis than individual marijuana stocks. After all, their diverse product lines can provide safety from the volatility of the sector. They will still benefit from the growth and sales of cannabis-related products.
At the end of the day, it’s a win-win for investors.
With that, here are three consumer stocks hitching a ride to rising cannabis demand.
Mondelez International Inc (MDLZ)
Source: Shutterstock
We already mentioned how Mondelez International’s (NASDAQ:) portfolio of snack foods, cookies, and candy is a bit on the boring side. Top brands like Nabisco and Cadbury produce plenty of stable cash flows, profits, and sales for MDLZ. And thanks to their discretionary nature, the firm has been able to pass on price increases with relative ease.
But that huge stable of brands could mean plenty of pin-action and growth as MDLZ pivots to adding cannabis to its products. Mondelez CEO Dirk Van de Put mentioned that the firm was looking into adding CBD-infused snacks to their product line.
Mondelez has been working hard to expand into a variety of natural, organic and healthy snack foods. These healthy snacks come with higher margins and are one of the reasons why MDLZ has seen revenues tick higher in recent quarters. Cannabis would be a natural fit to this. Given that consumers already trust and recognize its portfolio of top brands, they could be more willing to try a Nabisco-branded CBD snack than some other unknown brand. This gives the firm an edge in actually getting people to buy cannabidiol-infused foods.
While MDLZ hasn’t partnered with any marijuana stocks just yet, it will be ready to make the plunge sooner rather than later, which could be great for investors.
Molson Coors (TAP)
Source:
Constellation Brands is not the only spirit maker looking at marijuana stocks. Brewing giant Molson Coors Brewing (NYSE:) has caught the cannabis bug as well. And TAP is going full-bore into the sector.
Late last year, Molson Coors partnered with Quebec-based Hydropothecary Corporation (NYSEAMERICAN:). The duo formed a joint venture — dubbed Truss — that will primarily focus on non-alcoholic, cannabis-infused beverages.
Canada has already legalized marijuana and cannabis-infused beverages will be available in the country at the end of 2019. For Molson Coors, this is a big opportunity. The firm’s size gives it a huge edge in Canada right from the get-go: TAP estimates that this drink market could be .
Molson Coors will be able to score a high percentage of much-needed revenues.
In the U.S., analysis from investment bank Cowen that states with legal cannabis binge-drink 13% fewer times per month than non-cannabis states. The idea is that TAP can pick up revenues in Canada and then add additional revenues here in the U.S. when cannabis becomes fully legal.
For investors, TAP stock could be a sure thing. It already has a big foothold in key markets and should be able to boost its fortunes with its marijuana stock deal.
Diageo (DEO)
Source:
Johnnie Walker, Smirnoff, Captain Morgan, and Guinness have served Diageo (NYSE:) well over the years. These top booze brands — along with the rest of DEO’s massive staple of spirits — have continued to rack up billions in annual sales. And they are about to get even better.
DEO hasn’t been shy about its intentions to add cannabis to their lineup of brands. BNN Bloomberg reported that Diageo was conducting talks with several different marijuana stocks for partnerships. A deal hasn’t been reached yet, but it could happen soon.
For one thing, pot stock Aphria’s (NYSE:) chief commercial officer, Jakob Ripshtein, was formerly the chief financial officer of Diageo North America and president of Diageo Canada. Meanwhile, spirit sales have slowed in North America over the last year. This provides plenty of impetus to get a deal done.
DEO’s brand range includes 14 of the top 100 premium distilled spirits brands and seven of the top 20 premium spirits brands worldwide. Like TAP and MDLZ, this huge portfolio gives Diageo a significant edge in getting consumers to actually try CBD-infused products in the first place. The best part is that these DEO brands are consumed globally. Its moves today could make it the global leader in marijuana sales.
Meanwhile, investors can score a respectable dividend of 2% while they wait.
At the time of writing, Aaron Levitt did not hold a position in any stock mentioned.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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These top booze brands — along with the rest of DEO’s massive staple of spirits — have continued to rack up billions in annual sales. Diageo (DEO) Source: Johnnie Walker, Smirnoff, Captain Morgan, and Guinness have served Diageo (NYSE:) well over the years. DEO hasn’t been shy about its intentions to add cannabis to their lineup of brands.
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Diageo (DEO) Source: Johnnie Walker, Smirnoff, Captain Morgan, and Guinness have served Diageo (NYSE:) well over the years. These top booze brands — along with the rest of DEO’s massive staple of spirits — have continued to rack up billions in annual sales. DEO hasn’t been shy about its intentions to add cannabis to their lineup of brands.
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DEO’s brand range includes 14 of the top 100 premium distilled spirits brands and seven of the top 20 premium spirits brands worldwide. Diageo (DEO) Source: Johnnie Walker, Smirnoff, Captain Morgan, and Guinness have served Diageo (NYSE:) well over the years. These top booze brands — along with the rest of DEO’s massive staple of spirits — have continued to rack up billions in annual sales.
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Diageo (DEO) Source: Johnnie Walker, Smirnoff, Captain Morgan, and Guinness have served Diageo (NYSE:) well over the years. These top booze brands — along with the rest of DEO’s massive staple of spirits — have continued to rack up billions in annual sales. DEO hasn’t been shy about its intentions to add cannabis to their lineup of brands.
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3c44c2f4-9b92-47b5-99b8-2a1a332e914a
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727772.0
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2019-07-01 00:00:00 UTC
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Constellation Brands' Strong Q1 May Not Be Repeatable
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DEO
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https://www.nasdaq.com/articles/constellation-brands-strong-q1-may-not-be-repeatable-2019-07-01
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nan
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nan
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Constellation Brands (NYSE: STZ) brewed up another strong quarter on the back of its Corona and Modelo family of beer brands, which posted stronger-than-expected shipment volumes.
Although first-quarter sales beat analyst projections, the beer distributor was weighed down by its $4 billion investment in marijuana producer Canopy Growth (NYSE: CGC), which turned a year-ago profit for Constellation into a loss. But absent Canopy's impact, Constellation earnings blew past Wall Street's profit forecast, posting earnings of $2.21 per share versus the consensus estimate of $2.07 per share.
With its beer still on a solid growth trajectory and its wine and spirits business ready to capitalize on the continued premiumization trend, Constellation Brands still seems to be on solid ground.
Image source: Getty Images.
Beer is still dear
Mexican imports continue to dominate the beer market. Not only did Constellation's beer segment post robust 7% depletions growth in the quarter, but its Modelo Especial beer was the entire U.S. beer industry's top market-share winner, witnessing 17% depletion growth. Depletions, which are sales to distributors and retailers, are typically considered an industry proxy for consumer demand.
The strong performance is not really a surprise, as the market researchers at IRI recorded phenomenal gains by almost all of Constellation's beer brands in May. But the beer distributor also said it is expecting shipment volumes to reverse for the remainder of the year, meaning this could be the high-water mark for the company.
That slack might be picked up by Constellation's wine and spirits portfolio, though. It sold a collection of lower-end brands to E&J Gallo Winery for $1.7 billion so it could focus almost exclusively on the premium and super-premium markets. It's a strategy rival Diageo has been pursuing effectively, as it also unloaded a bevy of low-end spirits last year.
Although reported results are obviously down year over year because of the loss of contribution from these wines and spirits, Constellation's remaining premium portfolio delivered industry-leading depletion growth of 4%.
Portfolio payoffs still to come
The surprise here might be that its Svedka vodka brand saw depletions grow 6% in the quarter. Vodka has generally been one of the weaker spirits, with the Distilled Spirits Council reporting volume growth of just 1.6% in 2018. But that was not spread evenly across the price categories, as value, premium, and super-premium segments were all lower year over year, with only high-end premium gaining. That gain was an 11.4% increase, which was able to offset all the declines seen in the other categories and serves to underscore Constellation's bet in the high-end market.
Cannabis-based drinks are somewhere in Constellation's future, too, should they be legalized in the U.S., but right now its investment in the space is a drag. Constellation issued full-year earnings guidance of $8.65 per share to $8.95 per share, but when you include Canopy in the mix, that drops to just $4.95 per share to $5.25 per share.
The company, though, said it was keeping Canopy's impact out of its assumptions for now as it continues to evaluate how that will affect earnings. And those assumptions still see beer net sales and operating income growing 7% to 9% and wine and spirits sales falling as much as 25%, though that's because of the sale of Constellation's low-end portfolio. It anticipates the deal closing by the end of the second quarter.
Growth is still on tap
Constellation is still investing in the rest of its business, forecasting it will spend anywhere from $800 million to $900 million in capital expenditures, but it knows into which glass to put its lime: Some $600 million of those investments will be going into Mexican beer to expand operations.
The distributor has introduced several new products, such as Corona Premier, a super-light beer, and Refresca, a flavored malt beverage tackling the hard seltzer market, which has been a major boost to the craft beer industry.
Constellation Brands remains the leading beer company among a sea of rivals all watching their brands slack off and decline, but it has positioned itself to dominate wine and spirits, too. But it expects volumes to shift lower for the rest of the year, which could mean Constellation will see its stock go flat.
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Rich Duprey has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Brands. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Although first-quarter sales beat analyst projections, the beer distributor was weighed down by its $4 billion investment in marijuana producer Canopy Growth (NYSE: CGC), which turned a year-ago profit for Constellation into a loss. The strong performance is not really a surprise, as the market researchers at IRI recorded phenomenal gains by almost all of Constellation's beer brands in May. It sold a collection of lower-end brands to E&J Gallo Winery for $1.7 billion so it could focus almost exclusively on the premium and super-premium markets.
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Not only did Constellation's beer segment post robust 7% depletions growth in the quarter, but its Modelo Especial beer was the entire U.S. beer industry's top market-share winner, witnessing 17% depletion growth. Although reported results are obviously down year over year because of the loss of contribution from these wines and spirits, Constellation's remaining premium portfolio delivered industry-leading depletion growth of 4%. But that was not spread evenly across the price categories, as value, premium, and super-premium segments were all lower year over year, with only high-end premium gaining.
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With its beer still on a solid growth trajectory and its wine and spirits business ready to capitalize on the continued premiumization trend, Constellation Brands still seems to be on solid ground. Not only did Constellation's beer segment post robust 7% depletions growth in the quarter, but its Modelo Especial beer was the entire U.S. beer industry's top market-share winner, witnessing 17% depletion growth. Constellation Brands remains the leading beer company among a sea of rivals all watching their brands slack off and decline, but it has positioned itself to dominate wine and spirits, too.
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Although reported results are obviously down year over year because of the loss of contribution from these wines and spirits, Constellation's remaining premium portfolio delivered industry-leading depletion growth of 4%. Portfolio payoffs still to come The surprise here might be that its Svedka vodka brand saw depletions grow 6% in the quarter. And those assumptions still see beer net sales and operating income growing 7% to 9% and wine and spirits sales falling as much as 25%, though that's because of the sale of Constellation's low-end portfolio.
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2019-06-26 00:00:00 UTC
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6 Safe Dividend Stocks to Buy Now
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DEO
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https://www.nasdaq.com/articles/6-safe-dividend-stocks-to-buy-now-2019-06-26
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nan
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[Editor’s note: This story was previously published in May 2019. It has since been updated and republished.]
From continuing concerns about the China-U.S. trade war to worries about the interest rates, the stock market still faces many steep risks.
America’s political situation hasn’t been this tense in decades. The EU is facing a host of challenges, there’s always volatility lurking somewhere.
Add it all up, and things could easily get volatile quite soon. That leaves investors wondering where they can go for safety.
After years of tech outperforming everything, the problems facing Apple (NASDAQ: ), Facebook (NASDAQ:), and Amazon (NASDAQ:) have many people bailing on growth as well.
That leaves safe-haven stocks as a more favorable alternative. Here are six worth taking a look at.
Diageo (DEO)
Dividend Yield: 2.00%
Rain or shine, good economy or bad, people like to drink alcohol. And for , that makes Diageo (NYSE:) an ideal play. While its name may not be familiar, its brands almost certainly are. Diageo owns and manufactures Guinness beer, Captain Morgan rum, Smirnoff vodka and Johnnie Walker whiskey, among many others.
Source:
DEO stock is a well-known safe haven for investors. The company is headquartered in the U.K. and was one of the very few stocks to go up the day after Brexit in that country as British investors sold risky stocks and moved to safety. Diageo will again serve as a safe haven whenever the next bear market/recession hits.
Diageo isn’t just a great business, it’s also a great dividend play. The company has continuously raised its dividend (as measured in its home currency of British Pounds) each of the past 20 years.
Campbell Soup (CPB)
Dividend Yield: 3.41%
Campbell Soup (NYSE:) is one of the unloved packaged-foods makers. It’s not hard to see why, if you only think about the company’s name. Canned soup certainly isn’t trendy with younger consumers at this point. And there’s a general nutritional wariness about heavily salted foods.
Source: Shutterstock
That said, there’s much more to Campbell Soup than just the iconic red cans. The company is more and more a snack food play. As we know, while Americans profess an interest in healthier eating, they still love their junk food from time to time. Campbell’s, owner of Hanover, Pop Secret, Goldfish and Pepperidge Farm, is in a great position to profit off of this.
Pepsico (NYSE:), the leader in snacks, consistently gets a high P/E ratio from the market, as investors acknowledge the stickiness of their brands with consumers. The market, however, is not appreciating Campbell Soup at all. Shares are down from $50 in 2017 to $31 now.
That has attracted activist investors, who got a new CEO hired and are demanding more change. If shares stay down here, expect that a suitor will buy out the company at a nice premium. If not, enjoy the dividend.
PacWest Bancorp (PACW)
Dividend Yield: 6.34%
After investors dumped bank stocks late last year, a lot of value has been created in this generally overlooked sector of the market, where solid dividends abound.
Source: Shutterstock
That brings us to PacWest Bancorp (NASDAQ:), which offers a more-than 6% dividend yield at the moment. Headquartered in Los Angeles, PacWest is a major player throughout the California market and currently sports a $5.1 billion market cap. That puts it in a sweet spot, size-wise, where it may still be a buyout candidate, but it is large enough to manage the rising costs of regulation and banking technology costs.
Despite the horrid state of the California housing market in 2008, PacWest survived the crisis. In fact, its shares never came close to zero during the panic. The bank has come out stronger, and is now generating record profits. Thanks to the corporate tax cuts in particular, PACW stock is now at a cheap P/E ratio of just 10.89 times its trailing earnings.
New York Community Bancorp (NYCB)
Dividend Yield: 8.61%
Despite its large yield, New York Community Bancorp (NASDAQ:) is an even safer bank stock. NYCB stock currently yields 8.61%, and they earn more than enough to cover the dividend, with earnings coming in at around 79 cents and dividends at 68 cents annually.
NYCB stock was down 12% last year because the sector was down, as discussed above. Over the last few months, though, it has fought its way back to the levels it traded at before the fall. That’s why the bank is one of the safest in the country. It lends primarily against multi-family homes in New York City, one of the lowest-risk lending markets out there.
The bank’s loans barely budged in performance even during 2008. With a strong dividend covered out of earnings and a safe loan book, investors can earn a large dividend income from a most conservative bank.
Southern Co (SO)
Dividend Yield: 4.43%
In the worst of times, people tend to still want to use electricity. Even a severe economic downturn tends to not impact utility stocks too dramatically. As such, it’s a sound sector to buy when investors get panicky, such as what we’re seeing with the market now.
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Southern Co (NYSE:), as one of the highest-yielding large power utilities, checks the boxes for safe dividend stocks here. SO stock is currently yielding more than 4%.
Its high yield is in large part, it seems, due to interest rates going up. Many investors treat utility stocks as substitutes for bonds. As such, when interest rates go up, investors demand a higher yield from their utility stock as well. If interest rates were to keep surging for years to come, SO stock would likely underperform. Right now, though, that clearly is not the case.
Exxon Mobil (XOM)
Dividend Yield: 4.56%
Speaking of things people use in good times and bad, gasoline ranks pretty highly on the list. Sure there is a minor drop-off in consumption during recessions, as people take fewer road trips, for example, but in general, oil and gas is a safe haven business. And Exxon Mobil (NYSE:) as the largest U.S. player is a true sleep-well-at-night stock.
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The combination of a fortress balance sheet, diversified operations and a storied dividend make XOM stock an excellent place to endure market storms. It may seem strange to call Exxon diversified. But what many investors don’t realize is that much of big oil has spun off the other segments of their businesses.
We saw a ton of refining and pipelines subsidiaries moved out of the parent companies into MLPs and other corporate entities. That is all well and good as far as shareholder value maximization goes. But Exxon’s more diversified approach ensures that it remains solidly profitable even when the price of oil plummets, as it did in recent years.
XOM stock is hardly the most exciting in a high growth market. But at 16 times earnings and paying a slightly greater than 4% dividend yield, it is a fine option for defensive investors. And buyers are still getting a fair value at this point.
At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock. You can reach him on Twitter at @irbezek.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (DEO) Dividend Yield: 2.00% Rain or shine, good economy or bad, people like to drink alcohol. Source: DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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Diageo (DEO) Dividend Yield: 2.00% Rain or shine, good economy or bad, people like to drink alcohol. Source: DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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Diageo (DEO) Dividend Yield: 2.00% Rain or shine, good economy or bad, people like to drink alcohol. Source: DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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Diageo (DEO) Dividend Yield: 2.00% Rain or shine, good economy or bad, people like to drink alcohol. Source: DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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2019-06-24 00:00:00 UTC
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Dry States: The Decline of Alcohol in the U.S.
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DEO
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https://www.nasdaq.com/articles/dry-states%3A-the-decline-of-alcohol-in-the-u.s.-2019-06-24
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This article was first published by MyWallSt.
There are certain countries that are defined, rightly or wrongly, by their most popular national beverage.
In Ireland, barely a tourist passes through that doesn't sample a pint of Guinness. In France, there's champagne and, of course, wine — varieties of which echo across much of southern Europe in countries like Spain and Italy. Russia equates to vodka in the minds of many, Mexico with tequila, while over in Japan, sake forms part of the national experience for visitors.
In these blunt terms, America is often associated with good old beer. Miller, Coors, Rolling Rock, Budweiser — there are a host of iconic beer brands that are deeply ingrained in the cultural image of the U.S. across TV, cinema, and music. That all looks like it's about to change, however.
Image Source: Unsplash
The Fall of Alcohol
As discussed in an episode of the Stock Club podcast, new data is emerging which signals that Americans are increasingly turning their backs on alcohol.
The IWSR, an industry tracker for the drinks market, reported that total U.S. alcohol volumes dropped by 0.8% in 2018 — a slightly steeper decline than the 0.7% drop in 2017 and the third straight year of overall decline.
Much of this fall is attributed to beer, the worst hit category of all alcoholic beverages. Beer sales volumes were down 1.5% in 2018 compared with a 1.1% decline in 2017. Elsewhere, growth in spirits and wine sales fell too, with wine growing by just 0.4% — down from 1% growth the year before — and spirits climbing 1.9% compared with 2.2% in 2017.
These figures might seem marginal, but they are representative of a larger trend of declining alcohol consumption across the U.S.
The primary reason for this is that medical research has helped us to recognize how many common activities are detrimental to our health —alcohol consumption included. A similar shift affected the tobacco industry previously, resulting in a complete sea change in cultural perception over the course of a few decades. According to recent data by the Centers for Disease Control and Prevention, an estimated 14% of adults in the US (34.3 million people) smoked cigarettes in 2017. This record low represents a 67% decline from the rates of smoking in 1965 when the National Health Interview Survey estimated that about 42.4% of adults smoked.
Alcohol hasn't experienced such a drastic decline as tobacco because its negative effects have been countered somewhat by the belief that there were some positives too. We've all heard the stories that a glass of red wine a week can help the heart, and indeed most governments and health bodies issue alcohol consumption guidelines which indicate that, if kept within certain bounds of moderation, alcohol consumption is quite safe and even beneficial.
This notion has come under increasing attack lately, however, as science advances and scrutiny grows. Indeed, the cancer risks associated with alcohol consumption are becoming more recognized, with the UK Chief Medical Officer Sally Davies saying in an interview on national television, "There is no safe level of drinking."
Even still, it's unlikely that alcohol consumption will ever be completely eradicated, at least not in our lifetime. It is probable that people will begin to take a much more tempered and conservative approach toward consumption in the future though, with the data from the U.S. signaling the beginning of this. So how will major alcohol producers react to such a changing landscape?
Less is More (Expensive)
One notable way that alcohol companies are tackling the trend of falling alcohol consumption is a strategy called 'premiumization'.
Premiumization is a 'less-but-better' approach. Instead of focusing entirely on selling high volumes of standard beer and wines, companies have shifted to selling more high-margin products — specifically premium-label spirits— at lower volumes and increased prices.
Quite often, these premium beverages also contain a lower level of alcohol too. Diageo (NYSE: DEO), for example, recently launched a lower-alcohol, botanical version of Ketel One vodka, which it said has 25% fewer calories than the regular vodka and an alcohol content level of 30% compared to 40% in regular Ketel One.
Diageo CEO Ivan Menezes said last year that adults opting for lower alcohol options was "an important trend over the next many years" and that the company was "putting a lot of focus behind it." Diageo also recently bought the Casamigos tequila brand founded by actor George Clooney, a bottle of which can retail between $40 to $120.
This notion of premiumization extends to craft beers too and the seasonal brews that companies like the Boston Beer Company (NYSE: SAM) are renowned for. With this, they put a focus on the consumer enjoying the tasting experience rather than the act of drinking, albeit for a higher price.
The ISWR report says "premiumization remains one of the single largest market drivers across most developed economies and across almost all product categories."
Brown Forman (NYSE: BF.B) owns some of the world's most recognizable premium whiskey brands in Jack Daniels and Woodford Reserve. Special editions of these brands — for example, this Frank Sinatra version of Jack Daniels — allow the company to sell its already well-known brands for a higher markup.
Non-Alcoholic Drinks
Like tobacco and alcohol, the sugar industry is also experiencing health-related challenges. Medical research over the past few years has shown up sugar as an ingredient that has essentially no health benefits to the consumer, resulting in a worldwide drop in the sales of sugary drinks. However, companies like Coca-Cola (NYSE: KO), Pepsi (NASDAQ: PEP), or Monster Energy (NASDAQ: MNST) haven't just rolled over and died — they've started broadening their portfolios to include non-sugar products.
Brewers have taken a similar approach to nonalcoholic drinks. For example, Anheuser-Busch (NYSE: BUD) — the owners of all-American brands like Budweiser and Rolling Rock — has recently created a new global position, 'Head of Nonalcoholic Beverages', to lead its efforts to diversify into nonalcoholic drinks. This segment includes energy drinks and non-alcoholic beers and already makes up more than 10% of the companies brewer's volumes.
Diageo is also racing to expand in the non-alcoholic category through its venture arm Distill Ventures. It has already invested in alcohol-free gin brand Seedlip and has made a number of undisclosed investments targeting alcohol-free beverages.
Cannabis
Of course, there's more than one way to self-medicate.
With its recent legalization in Canada and its gradual acceptance across the U.S. (10 states and counting), the burgeoning marijuana industry could very likely be the future way that the ordinary citizen uses substances to relax.
Before you jump on the trend, however, it's important to remember that the sale, supply, and consumption of cannabis is still illegal at a federal level in the U.S., and this doesn't look likely to change significantly any time over the next few years. But as a long-term bet, many larger companies — brewers included — are taking significant stakes in small marijuana and CBD (cannabidiol) producers as a means of keeping abreast of this growing trend.
Constellation Brands (NYSE: STZ) made a $4 billion investment into the Canadian cannabis grower Canopy Growth (NYSE: CGC) last year, meaning that they have a significant stake in the world's largest cannabis company. Future plans that the companies have outlined include crossovers between products like cannabis-infused beverages and sleep aids.
Similarly, Molson Coors (NYSE: TAP) has partnered with the Canadian cannabis producer, HEXO (NYSEMKT: HEXO) (TSX: HEXO), to create a joint partnership that will "pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market."
With the branding expertise and distribution channels already in place, we can expect to see many of today's major brewers become the major growers and suppliers in tomorrow's global cannabis industry.
China
Finally, it's important to acknowledge that, in other parts of the world, alcohol consumption is still growing.
With a population of almost 1.4 billion and a rapidly expanding middle-class, China might seem like the golden ticket for tech companies, but alcohol consumption is also predicted to continue growing in China through 2020. This means that China will become the primary market for many international liquor companies going forward.
In the first half of 2018, for example, beer sales in China rose 34% year-on-year to hit $84 million. Sales of other types of alcohol including canned cocktails, whiskey, and wines are also growing massively in the country, with drinking culture — toasting in particular — a very important and pervasive social ritual in the country.
From an American brewer perspective, China represents a lucrative future in alcohol sales, though potential tariffs from a trade war between the countries would severely damage this.
But is this the end of alcohol in the U.S.?
It's very unlikely, but just as tobacco consumption is falling and related activities like vaping are growing, companies involved in the production and selling of alcohol need to adapt quickly and pre-empt major shifts in consumer tastes. It's those that can adapt best which will prosper.
It might be no longer feasible for brewers to push out the same old lines of beers, wines, and spirits, but there is ample opportunity for companies willing to innovate and experiment with the experience of alcohol consumption.
Image Source: MyWallSt
MyWallSt operates a full disclosure policy. MyWallSt staff hold long positions in Coca-Cola and Constellation Brands. Read our full disclosure policy here.
The Motley Fool owns shares of and recommends Boston Beer and Monster Beverage. The Motley Fool owns shares of Molson Coors Brewing. The Motley Fool recommends Anheuser-Busch InBev NV, Constellation Brands, Diageo, HEXO., and HEXO. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (NYSE: DEO), for example, recently launched a lower-alcohol, botanical version of Ketel One vodka, which it said has 25% fewer calories than the regular vodka and an alcohol content level of 30% compared to 40% in regular Ketel One. Medical research over the past few years has shown up sugar as an ingredient that has essentially no health benefits to the consumer, resulting in a worldwide drop in the sales of sugary drinks. But as a long-term bet, many larger companies — brewers included — are taking significant stakes in small marijuana and CBD (cannabidiol) producers as a means of keeping abreast of this growing trend.
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Diageo (NYSE: DEO), for example, recently launched a lower-alcohol, botanical version of Ketel One vodka, which it said has 25% fewer calories than the regular vodka and an alcohol content level of 30% compared to 40% in regular Ketel One. Constellation Brands (NYSE: STZ) made a $4 billion investment into the Canadian cannabis grower Canopy Growth (NYSE: CGC) last year, meaning that they have a significant stake in the world's largest cannabis company. It's very unlikely, but just as tobacco consumption is falling and related activities like vaping are growing, companies involved in the production and selling of alcohol need to adapt quickly and pre-empt major shifts in consumer tastes.
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Diageo (NYSE: DEO), for example, recently launched a lower-alcohol, botanical version of Ketel One vodka, which it said has 25% fewer calories than the regular vodka and an alcohol content level of 30% compared to 40% in regular Ketel One. Less is More (Expensive) One notable way that alcohol companies are tackling the trend of falling alcohol consumption is a strategy called 'premiumization'. It's very unlikely, but just as tobacco consumption is falling and related activities like vaping are growing, companies involved in the production and selling of alcohol need to adapt quickly and pre-empt major shifts in consumer tastes.
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Diageo (NYSE: DEO), for example, recently launched a lower-alcohol, botanical version of Ketel One vodka, which it said has 25% fewer calories than the regular vodka and an alcohol content level of 30% compared to 40% in regular Ketel One. Quite often, these premium beverages also contain a lower level of alcohol too. Constellation Brands (NYSE: STZ) made a $4 billion investment into the Canadian cannabis grower Canopy Growth (NYSE: CGC) last year, meaning that they have a significant stake in the world's largest cannabis company.
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727775.0
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2019-06-19 00:00:00 UTC
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Will Corona Keep Constellation Brands Growing?
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DEO
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https://www.nasdaq.com/articles/will-corona-keep-constellation-brands-growing-2019-06-19
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nan
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Beer is very important to Constellation Brands (NYSE: STZ). Its Corona and Modelo families of Mexican beer helped the segment account for 64% of the company's total sales and almost all of its operating income.
Mexican beer also happens to be crucial to the current growth of the craft beer industry. Imported beer accounted for 20% of craft production in 2018, and Mexican beer represented over 72% of all imports. Constellation told investors last quarter that its beer portfolio was the primary growth contributor to the U.S. beer market last year and all of its imported brands achieved record sales volumes.
With Corona and Modelo an essential part of the future -- for the company and the industry -- let's look at the role they might play as Constellation prepares to report its first-quarter earnings at the end of the month.
Image source: Constellation Brands.
Brand dominance
Data from the market researchers at IRI give the combined Corona and Modelo brands a 61% share of import dollar sales and 60% of case sales. Modelo's dollar sales surged 18% higher last year, substantially better than the 11.6% increase in Corona sales, and more than twice the amount of the next closest brand, Constellation's Pacifico, at 8.4%.
The only imported beers not owned by Constellation that also showed any kind of growth last year were Diageo's Guinness, which rose 0.9%, and MillerCoors Foster's, which was up 0.7%. Every other major brand family suffered declines in dollar sales, and only Corona, Modelo, and Pacifico saw case sales rise.
Yet that growth did not extend across the brand families. Corona Extra, for example, Constellation's flagship brand, saw sales fall 4% last year while losing 0.1% of market share. The beer distributor's second-biggest beer, Corona Light, tumbled 11.5%.
Constellation was more than able to make up for it with brand extensions like Corona Premier, a super-light beer targeting Anheuser-Busch InBev's (NYSE: BUD) perennial favorite Michelob Ultra, and Familiar, a beer targeted to Latino males that blew up with sales growing almost 140% last year.
But CEO Bill Newlands has told analysts that the line extensions cannibalize sales from existing labels, noting that the better they do, the more they have some impact on its other franchises.
Getting sales growing again
Earlier this year, Constellation also began distributing Corona Refresca, another extension it took nationwide last month. It's a sparkling flavored malt beverage imported from Mexico that seeks to capitalize on the popularity of hard seltzers like Truly from Boston Beer (NYSE: SAM), which are also helping push craft beer sales higher.
While it's smart to use the Corona name to build up a broader portfolio that might otherwise succumb to brand fatigue, perhaps more worrisome are the reports of Constellation now discounting certain labels heading into the summer.
Corona has typically been positioned and priced as a premium beer above even Michelob Ultra, but industry site Beer Marketer's Insights reported the brewer was dropping the price on Corona Extra, Light, and Premier by about $2 a case, which would still allow it to be ranked above the likes of Budweiser and Bud Light, but would now be equal to or slightly below Michelob Ultra.
Constellation will also be putting more of its beer into cans, which better allows for taking it to parks, beaches, and other places where glass bottles are not permitted.
The price cuts, though, will eat into margins. Last year, Constellation saw operating margins slip to 39.3% despite better pricing because higher marketing and transportation costs offset the gains. Now, it won't have the pricing benefit to keep it aloft, and margins could react accordingly, though it may not show up in its first-quarter results.
Plenty of growth prospects
Constellation Brands still has its wine and spirits business that it has positioned for premium leadership, though it is expecting the shipment volume increases it enjoyed last year to reverse in the first quarter. Having sold off its discount portfolio, it expects net sales and operating margins in wine and spirits to fall this year. Its investment in marijuana producer Cronos Group is another potential growth driver, but that is a long-term play.
That leaves beer to carry the load for Constellation, and though the Corona and Modelo families of brands are more than up to the task, there are individual nuances to be mindful of that may see this premium beer importer slip as the year progresses.
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Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Boston Beer. The Motley Fool recommends Anheuser-Busch InBev NV, Constellation Brands, and Diageo. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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With Corona and Modelo an essential part of the future -- for the company and the industry -- let's look at the role they might play as Constellation prepares to report its first-quarter earnings at the end of the month. While it's smart to use the Corona name to build up a broader portfolio that might otherwise succumb to brand fatigue, perhaps more worrisome are the reports of Constellation now discounting certain labels heading into the summer. Plenty of growth prospects Constellation Brands still has its wine and spirits business that it has positioned for premium leadership, though it is expecting the shipment volume increases it enjoyed last year to reverse in the first quarter.
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Constellation was more than able to make up for it with brand extensions like Corona Premier, a super-light beer targeting Anheuser-Busch InBev's (NYSE: BUD) perennial favorite Michelob Ultra, and Familiar, a beer targeted to Latino males that blew up with sales growing almost 140% last year. Having sold off its discount portfolio, it expects net sales and operating margins in wine and spirits to fall this year. The Motley Fool recommends Anheuser-Busch InBev NV, Constellation Brands, and Diageo.
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Constellation told investors last quarter that its beer portfolio was the primary growth contributor to the U.S. beer market last year and all of its imported brands achieved record sales volumes. Constellation was more than able to make up for it with brand extensions like Corona Premier, a super-light beer targeting Anheuser-Busch InBev's (NYSE: BUD) perennial favorite Michelob Ultra, and Familiar, a beer targeted to Latino males that blew up with sales growing almost 140% last year. That leaves beer to carry the load for Constellation, and though the Corona and Modelo families of brands are more than up to the task, there are individual nuances to be mindful of that may see this premium beer importer slip as the year progresses.
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Its Corona and Modelo families of Mexican beer helped the segment account for 64% of the company's total sales and almost all of its operating income. Constellation told investors last quarter that its beer portfolio was the primary growth contributor to the U.S. beer market last year and all of its imported brands achieved record sales volumes. Having sold off its discount portfolio, it expects net sales and operating margins in wine and spirits to fall this year.
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2019-06-19 00:00:00 UTC
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10 ‘Buy-and-Hold’ Stocks to Own Forever
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DEO
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https://www.nasdaq.com/articles/10-buy-and-hold-stocks-to-own-forever-2019-06-19
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[Editor’s note: This story was previously published in February 2019. It has since been updated and republished.]
Investing to “buy and hold” is trickier than it looks. The increasing pace of technological change means even the most successful, dominant companies have to continually adapt to keep up. Industries like energy, real estate and even consumer products are facing potentially significant long-term changes going forward. In any era, amassing a collection of retirement stocks simply by buying the best companies and holding them for years can be a risky endeavor.
General Motors (NYSE:) was a classic “widows and orphans” stock until last decade, when GM wound up going bankrupt. United States Steel (NYSE:) once was a pillar of corporate America and a buy-and-hold stock. GM shares basically haven’t moved in a quarter of a century. Polaroid and Eastman Kodak were once blue-chip stocks. Both went bankrupt as cameras changed from film to digital.
But there still are stocks to buy and hold out there that can last forever, while offering dividend income along the way.
Here are ten such retirement stocks to buy and hold forever.
Source: Shutterstock
Bank of America (BAC)
Dividend Yield: 2.1%
It might seem strange to open the list with Bank of America (NYSE:). After all, we’re only a bit more than a decade on from the financial crisis. During that crisis, BofA acquisition Countrywide Financial blew up in spectacular fashion, after pioneering many of the risky tactics that led to the bubble and subsequent bust.
But this is a different BofA.
Net consumer charge-offs hit a decade-long low last year. Its performance on credit metrics is strong. Government regulations have been criticized as slowing growth — but they’ve undoubtedly lowered risk as well, even if observers might argue that a better balance is needed.
No less than , through his Berkshire Hathaway Inc. (NYSE:, NYSE:BRK.B). And the Oracle of Omaha is fond of saying that his favorite holding period is “forever.”
That seems likely true for BAC stock as well.
Source:
Diageo (DEO)
Dividend Yield: 2%
Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by Diageo (NYSE:) are well-positioned to adapt to shifting tastes.
Diageo owns classic brands like Johnnie Walker whisky, Tanqueray gin, Smirnoff vodka, and Harp and Guinness beer, among many others. What most have in common is a timeless quality and worldwide brand recognition. As a result, while beverage giants like Coca-Cola (NYSE:) and Anheuser Busch InBev (NYSE:) have struggled with earnings growth, Diageo grew net income by 13.5% in fiscal 2018 and expects consistent growth going forward.
Yet with a trailing multiple of 26.5, and with a dividend yield of 2%, Diageo stock isn’t all that dearly valued. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
Source:
Medtronic (MDT)
Dividend Yield: 2%
In this day and age, the U.S. healthcare market in particular seems potentially volatile. Concerns about increased spending and political battles over the Affordable Care Act create more questions than answers.
But even with that uncertainty, Medtronic (NYSE:) isn’t going anywhere. The company’s devices are an integral part of modern medicine, ranging from pacemakers to stents to bone grafts to imaging systems.
Even the risks involved in the sector look priced into MDT. Medtronic’s days of double-digit annual growth may well be behind it, but it’s not finished increasing earnings or dividends. MDT stock likely isn’t finished rising, either.
Source: Shutterstock
NextEra Energy (NEE)
Dividend Yield: 2.4%
Utility stocks are among the most common safe, buy-and-hold stocks. NextEra Energy (NYSE:) is now the largest electric utility in the U.S. by market capitalization. That might actually be the only problem with NEE stock.
NextEra shares gained 18% year-to-date, and trades just off record highs. Potential valuation concerns aside, NextEra looks like a winner. It serves customers in the southern Florida region, still one of the nation’s fastest-growing areas. A 22.6 forward P/E multiple is high for the space but not outlandishly so. And a 2.4% dividend yield provides income along the way.
Investors looking for value in the space might look for a smaller play like cheaper Dominion Energy (NYSE:). But it’s usually worth paying for quality, and NextEra Energy looks like one of the best utility stocks out there.
Source:
McCormick & Company
Dividend Yield: 1.5%
McCormick & Company (NYSE:) is another quality company whose valuation might spook some investors. But MKC stock very rarely is offered cheaply.
The company’s market leadership in spices and seasonings provides both an impressive moat and protection against economic downturns. MKC stock did dip after the company sauce from Reckitt Benckiser (OTCMKTS:) at a price that looked a bit high to many investors. But MKC has recovered those gains and then some.
Top-line growth for McCormick likely isn’t going to be explosive, but it will be steady. The same has been true of MKC stock, which has returned an average of 13% a year over the past decade, including dividends.
With continuous cost-cutting initiatives, the contribution from the acquired brands and organic growth (and growth in organic products), MKC still should be able to provide double-digit annual returns going forward as well.
Source: Shutterstock
Allstate Corp
Dividend Yield: 2%
Allstate Corp (NYSE:) long has used the tagline, “You’re in good hands,” and it’s true for Allstate investors as well. ALL stock has almost quadrupled from late-2011 lows. And there could be more upside to come.
After all, Allstate isn’t particularly expensive, trading at a 14 P/E.
Once any short-term worries subside, ALL should resume its march upward.
Source: Shutterstock
International Flavors & Fragrances (IFF)
Dividend Yield: 2%
International Flavors & Fragrances (NYSE:) is a company most consumers encounter every day without knowing it and many investors aren’t exactly hip to it, either.
As its name suggests, the company develops flavors & fragrances across 13 categories, including cosmetics, perfumes, beverages and sweet flavors. Sales and earnings have increased consistently and so has IFF’s share price. At a 53 P/E, IFF does look a bit pricey. But, as with McCormick and other stocks on this list, investors should pay for quality.
IFF’s hidden, but key role, in so many industries, gives it a great deal of protection against both competition and macro factors. Acquisitions and a growing cosmetic additive business both provide room for growth.
Consumers may not know IFF, but investors should.
Source: Shutterstock
Lamb Weston
Dividend Yield: 1.4%
Lamb Weston (NYSE:) was spun off from Conagra Brands (NYSE:) last year. Lamb Weston is the No. 1 potato producer in the United States. In fact, it manufactures the well-known fries at McDonald’s (NYSE:), among other restaurant chains.
Lamb Weston also has a consumer business (including a small segment that manufactures frozen vegetables), while serving restaurants of all sizes. Health concerns might seem a long-term headwind against the business, but growth has been steady for years, and margins continue to improve.
LW is targeting international markets for growth, as French fries have much more limited penetration, while international audiences generally are intrigued by Americanized products.
Despite growth and leading market share, LW stock isn’t particularly cheap, trading at about 19 times next year’s earnings. The company did pick up a fair amount of debt in the CAG spinoff. But it’s paying that debt down, which should lower interest expense and boost cash flow going forward.
With many similar stocks trading at much higher multiples, LW seems to have room for upside. And international growth should offset any health-related concerns in the U.S., should they arise. America’s love affair with French fries isn’t going to suddenly end, and that should ensure years of stability for Lamb Weston at least.
Source: Shutterstock
Fortune Brands (FBHS)
Dividend Yield: 1.6%
Investors are commonly advised to diversify their portfolio. Fortune Brands Home & Security (NYSE:) has done just that. The company operates in four segments: Cabinets, Plumbing, Doors, and Security. Among its well-known brands are Moen in plumbing, and MasterLock in security.
FBHS is more of a cyclical stock than most on this list, and the company no doubt has benefited from the steady, if slow, housing recovery in the U.S. But the company’s products also generate relatively stable replacement demand, and a 1.6% dividend yield provides modest, but growing, income.
Fortune Brands has been an impressive company since its founding and a solid stock since its 2011 IPO. There may be a bit more volatility here, but that’s a worthwhile price to pay for long-term investors. There’s enough value in Fortune Brands to ride out any market jitters.
Source: Shutterstock
Republic Services
Dividend Yield: 1.74%
Republic Services (NYSE:) is a bit smaller and likely a lot less well-known than rival Waste Management (NYSE:). But in this case, that’s not necessarily a bad thing.
Republic Services has outgrown its larger competitor in both sales and earnings over the past five years. RSG stock has modestly outperformed WM over the same period as well. Investors appear to believe that will continue, as Republic Services is valued a bit higher than Waste Management, at least based on forward earnings multiples.
Both RSG and WM are solid long-term plays. Contracted revenue and steady demand should support both companies for years to come. There’s room for further acquisitions in a relatively fragmented space. Republic Services gets the nod here due to slightly better growth and more room for margin improvement.
But investors looking for safe, stable growth can’t go wrong with either RSG or WM.
As of this writing, Vince Martin was long MKC.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Source: Diageo (DEO) Dividend Yield: 2% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. During that crisis, BofA acquisition Countrywide Financial blew up in spectacular fashion, after pioneering many of the risky tactics that led to the bubble and subsequent bust.
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Source: Diageo (DEO) Dividend Yield: 2% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. Source: Shutterstock Allstate Corp Dividend Yield: 2% Allstate Corp (NYSE:) long has used the tagline, “You’re in good hands,” and it’s true for Allstate investors as well.
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Source: Diageo (DEO) Dividend Yield: 2% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. Source: McCormick & Company Dividend Yield: 1.5% McCormick & Company (NYSE:) is another quality company whose valuation might spook some investors.
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Source: Diageo (DEO) Dividend Yield: 2% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. Source: Shutterstock NextEra Energy (NEE) Dividend Yield: 2.4% Utility stocks are among the most common safe, buy-and-hold stocks.
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2019-06-11 00:00:00 UTC
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How to Buy Into the Success of These 3 Everyday Products
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DEO
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https://www.nasdaq.com/articles/how-buy-success-these-3-everyday-products-2019-06-11
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The power of brand names is the consistency, durability, and trust they impart to consumers, who rely upon the products in their daily lives. Oftentimes, however, there are other companies behind the scenes that are working extra hard to make those brands meet those demands.
Below, read how Littelfuse (NASDAQ: LFUS), AMD (NASDAQ: AMD), and MGP Ingredients (NASDAQ: MGPI) do a lot of the heavy lifting to support products you didn't realize you use every day.
Image source: Getty Images.
Everywhere electricity is used
John Bromels (Littelfuse): On the starship Enterprise, it's easy to know when the ship's been hit, thanks to the showers of sparks that seem to fly everywhere. But in your home, if an electrical gadget gets fried by a power surge, a lightning strike, or just a malfunctioning component, the showers of sparks will probably be replaced by -- if anything -- a small "click."
That's thanks to products from Littelfuse, which manufactures fuses, circuit breakers, and other electrical circuit protection components. Littelfuse's products are used in everything from washers and dryers to industrial machinery, and its clients include every major automobile manufacturer.
When things are going well, of course, you don't even know that Littelfuse's products exist, even though they're protecting you every time you use an electrical device or vehicle in which they're installed. When things go wrong, you probably still don't think much about them, even though they're often what's causing a device to shut down as opposed to emitting showers of sparks.
Because Littelfuse's is a cyclical business -- dependent on industries like automobiles, construction, and major appliances -- a recent slowdown in the Chinese auto market has hurt the stock. However, CEO Dave Heinzmann predicts improvement in the second half of the year. With electric and electronic devices only becoming more common, this unseen but vital company is one to keep an eye on.
AMD is playing to win
Jamal Carnette, CFA (AMD): If you've used a PC today to send a work email, play a game of Fortnite, or simply browse the internet, it's increasingly likely you've done so using AMD's processors. The semiconductor manufacturer continues to steal market share from Intel's central processing unit (CPU) and graphic processing unit (GPU) businesses, and it's just getting started.
It wasn't always this way. When CEO Lisa Su took the reins in 2014, the company was struggling to keep its head above water, destined to be a commodity supplier in the rapidly declining laptop and PC market.
Su transformed the company by focusing on the higher-end GPU markets and on data center applications. Shares are up approximately 800% on her watch, including a 60% year-to-date gain. Although bears continue to predict AMD's rally will end, citing competition from NVIDIA, cryptocurrency headwinds, and rich valuations, the stock continues to power higher.
The newest catalyst is AMD's partnership with Samsung to bring its Radeon graphics technologies to Samsung chipsets. Not only is Samsung the largest smartphone maker, but the company also makes mobile chips for many manufacturers, including phone rival Apple. This makes AMD an instant force in the mobile market while adding high-margin licensing fees and royalty payments to the top line. Even after AMD's amazing rally, the company has further room to run.
Sailing on a whiskey river
Rich Duprey (MGP Ingredients): Want to kick back with a nice glass of premium whiskey at the end of a hard day? Maybe some bourbon or rye? You wouldn't be alone. The so-called "browns" of the spirit world have been in high demand, and that has helped the world's largest distiller Diageo post growing sales over the past few years -- its stock is up 22% in 2019.
What many are not aware of is that Diageo contracts much of its premium and superpremium whiskey from MGP Ingredients , a contract producer from Indiana that actually supplies more than 1 million barrels of whiskey to the industry. To put that in perspective, the Distilled Spirits Council of the U.S. says 23 million barrels of whiskey were produced in 2018. An article by Forbes earlier this year noted MGP and Calgary's Alberta Distillers produced about 90% of the rye whiskey bottled in the U.S.
But MGP Ingredients also produces food-grade industrial alcohol that finds its way into vinegar and food flavorings, hairsprays and hand sanitizers, cleaning solutions, and pharmaceuticals. Additionally, it sells fuel-grade alcohol to increase the octane and oxygen levels in gasoline and distillers' feed, which is used in animal feed as a high-protein additive. Wheat starches are sold to food processors and find their way into pudding and pie fillings, angel food cakes, soups, sauces, gravies, and frostings. And wheat proteins are used in white bread, hotdog buns, and hamburger rolls.
In short, there's a good chance that something you eat or drink every day is touched by MGP Ingredients. But whiskey is its primary business, and as there is no letup of demand in sight for this brown spirit, MGP has plenty of growth before it.
10 stocks we like better than Littelfuse
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Littelfuse wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of March 1, 2019
Jamal Carnette, CFA has no position in any of the stocks mentioned. John Bromels owns shares of Diageo. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool recommends Diageo and Littelfuse. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The newest catalyst is AMD's partnership with Samsung to bring its Radeon graphics technologies to Samsung chipsets. Because Littelfuse's is a cyclical business -- dependent on industries like automobiles, construction, and major appliances -- a recent slowdown in the Chinese auto market has hurt the stock. When CEO Lisa Su took the reins in 2014, the company was struggling to keep its head above water, destined to be a commodity supplier in the rapidly declining laptop and PC market.
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The newest catalyst is AMD's partnership with Samsung to bring its Radeon graphics technologies to Samsung chipsets. Below, read how Littelfuse (NASDAQ: LFUS), AMD (NASDAQ: AMD), and MGP Ingredients (NASDAQ: MGPI) do a lot of the heavy lifting to support products you didn't realize you use every day. That's thanks to products from Littelfuse, which manufactures fuses, circuit breakers, and other electrical circuit protection components.
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The newest catalyst is AMD's partnership with Samsung to bring its Radeon graphics technologies to Samsung chipsets. Below, read how Littelfuse (NASDAQ: LFUS), AMD (NASDAQ: AMD), and MGP Ingredients (NASDAQ: MGPI) do a lot of the heavy lifting to support products you didn't realize you use every day. What many are not aware of is that Diageo contracts much of its premium and superpremium whiskey from MGP Ingredients , a contract producer from Indiana that actually supplies more than 1 million barrels of whiskey to the industry.
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The newest catalyst is AMD's partnership with Samsung to bring its Radeon graphics technologies to Samsung chipsets. Below, read how Littelfuse (NASDAQ: LFUS), AMD (NASDAQ: AMD), and MGP Ingredients (NASDAQ: MGPI) do a lot of the heavy lifting to support products you didn't realize you use every day. When things are going well, of course, you don't even know that Littelfuse's products exist, even though they're protecting you every time you use an electrical device or vehicle in which they're installed.
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2019-05-29 00:00:00 UTC
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Tilray Stock Keeps Its Eyes on the Future
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DEO
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https://www.nasdaq.com/articles/tilray-stock-keeps-its-eyes-future-2019-05-29
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Tilray (NASDAQ:) stock, like other Canadian marijuana stocks, raised a lot of cash in 2018 and spawned a lot of hype. Now we will see if that cash can build a sustainable business.
Source: Shutterstock
Tilray got a slight bump with its recent earnings announcement — a loss of $30.3 million, 32 cents fully diluted,
The loss was excused by revenue being up 195% from the previous year. Tilray was finally able to do what it came to the market to do — sell marijuana to willing adults. The company brought in nearly $7.9 million from pot sales, and nearly $5.6 million from edibles, as Canadians started enjoying the drug legally.
But . We don’t yet know what Tilray can be.
The Hype Machine for TLRY Stock
Last year, when Tilray and other marijuana stocks were raising money and selling dreams of pot billions, in that its value had no relationship to reality.
The company went public last July with a first trade of $23.05. It was due to open May 29 at about $42.50. This means early investors have doubled their money, but those who bought the hype last fall, just like Bitcoin investors in late 2017, are out of the money. The stock peaked at $300 but traded over $100 regularly until December.
None of this has any relation to market reality. Even if Tilray hits projections of $414 million in sales for all of 2020, you’re still paying 10 times book at its current market cap of $4.3 billion.
Tilray has also spent the last year supplying itself with from Goldman Sachs (NYSE:), Coca-Cola (NYSE:), Starbucks (NASDAQ:) and Diageo (NYSE:). It also closed a partnership with Novartis (NYSE:) that the Novartis CEO is tired of talking about.
The hype machine did its job, but the get-rich-quick crowd has already sold. If you’re going to make money in Tilray, it will be from real operations.
Tilray and the Pot Shortage
Canada, which began allowing some legal cannabis sales late in 2018, has about 37 million people. Compare that to California, which has nearly 40 million. That’s a lot of market to supply, and . How long the shortage lasts is a subject for debate, with some saying it’s already .
In the short run, Tilray has been focused on supply, and because it had supply it nearly doubled revenue estimates . Now Tilray is looking past the short-term shortage and seeking to play in as many aspects of legal marijuana as it can.
As our Vince Martin , Tilray is focusing on branded products — on oils and edibles, flavorings, additives and drugs. This will let it take advantage of a supply glut whenever that happens, and it’s already starting in some markets.
The Bottom Line
The fortunes of Tilray balance largely on its controlling shareholder, Privateer Holdings of Seattle (headed by Tilray CEO Brendan Kennedy), and its . they have said they won’t sell any of the stock in the first half of the year.
It makes sense for those who got in with pennies on the dollar to get their investment back. But other investors are right to ask whether Privateer is in this for the long term.
I think they are. Tilray had over $500 million in cash on its books after , enough to fund its strategy shift away from the Canadian smoking market.
If you believe in a long-term future for marijuana stocks, Tilray makes sense. Just wait until the stock overhang and the hype both clear before you seek an entry point.
is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Even if Tilray hits projections of $414 million in sales for all of 2020, you’re still paying 10 times book at its current market cap of $4.3 billion. Tilray and the Pot Shortage Canada, which began allowing some legal cannabis sales late in 2018, has about 37 million people. As our Vince Martin , Tilray is focusing on branded products — on oils and edibles, flavorings, additives and drugs.
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Tilray (NASDAQ:) stock, like other Canadian marijuana stocks, raised a lot of cash in 2018 and spawned a lot of hype. The company brought in nearly $7.9 million from pot sales, and nearly $5.6 million from edibles, as Canadians started enjoying the drug legally. The Hype Machine for TLRY Stock Last year, when Tilray and other marijuana stocks were raising money and selling dreams of pot billions, in that its value had no relationship to reality.
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Tilray (NASDAQ:) stock, like other Canadian marijuana stocks, raised a lot of cash in 2018 and spawned a lot of hype. The Hype Machine for TLRY Stock Last year, when Tilray and other marijuana stocks were raising money and selling dreams of pot billions, in that its value had no relationship to reality. Tilray has also spent the last year supplying itself with from Goldman Sachs (NYSE:), Coca-Cola (NYSE:), Starbucks (NASDAQ:) and Diageo (NYSE:).
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Tilray (NASDAQ:) stock, like other Canadian marijuana stocks, raised a lot of cash in 2018 and spawned a lot of hype. The company brought in nearly $7.9 million from pot sales, and nearly $5.6 million from edibles, as Canadians started enjoying the drug legally. The Hype Machine for TLRY Stock Last year, when Tilray and other marijuana stocks were raising money and selling dreams of pot billions, in that its value had no relationship to reality.
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2019-05-18 00:00:00 UTC
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3 Brand-Name Food and Beverage Companies That Want In on the Marijuana Craze
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https://www.nasdaq.com/articles/3-brand-name-food-and-beverage-companies-want-marijuana-craze-2019-05-18
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Legal marijuana is one of the fastest growing industries in North America right now, and there's a very good chance it'll stay this way for at least a few more years. Having generated $12.2 billion in global sales last year, per Arcview Market Research and BDS Analytics, legal pot sales are expected to surge to more than $31 billion worldwide by 2022.
This rapid growth has been the impetus behind aggressive capacity expansion initiatives and consolidation since the beginning of 2018. But it's also gotten the full and undivided attention of the traditionally slower-growing food and beverage industries, which are always looking for ways to enhance top-line growth and bolster profitability.
Image source: Getty Images.
Brand-name partnership opportunity pick up for pot stocks
The potential of partnering a brand-name company with a world-class cannabis stock was first noted in October 2017, when Modelo and Corona beer maker Constellation Brands made the first of what would become three investments into Canopy Growth. Although Constellation has motives here that extend beyond a simple partnership (i.e., it holds a 37% equity stake in Canopy), the initial stake signaled that the duo would be working on new products, including nonalcoholic cannabis-infused beverages.
In early August, the market was surprised when Molson Coors Brewing announced that it would be forming a 57.5%-42.5% joint venture with Quebec-based grower HEXO to develop nonalcoholic cannabis-infused beverages under the name Truss. These beverages are expected to hit dispensary shelves in Canada by this coming October.
The point being that big-name deals are happening, but we're ultimately still in the early innings of the legal cannabis rollout in Canada and throughout much of North America.
The bigger question is: Which brand-name food and beverage companies are next to seek out a partner in the marijuana industry?
Coca-Cola may be out, but these food and beverage companies may want in on the cannabis craze
About the only company we know that won't be is Coca-Cola (NYSE: KO). Aside from getting a finger-wag from large shareholder Warren Buffett, Coca-Cola has reiterated on numerous occasions since the fourth quarter that it's looked at the pot industry, but currently has no intention of seeking a partner or creating its own products. As a reminder, Coca-Cola was in talks with both Aphria (NYSE: APHA) and Aurora Cannabis (NYSE: ACB) last year about a possible equity stake and/or partnership, but nothing wound up materializing from these discussions.
That leaves three prominent food and beverage companies that do appear interested in getting in on the cannabis craze.
Image source: Getty Images.
Diageo
First up is alcoholic beverages maker Diageo (NYSE: DEO), which hasn't been shy about its interest in the cannabis industry. Although Diageo has done well with its portfolio of Johnnie Walker, Crown Royal, Captain Morgan, and Guinness beer, to name a few of its top brands, there's always room for sales improvement throughout North America. That's where dipping its toes into the cannabis pond could come in handy.
Like Coca-Cola and its peers, Diageo has been monitoring the marijuana industry closely and might currently be hesitant to strike a deal because of early stage teething pains being experienced in Canada right now. Supply shortages, especially for premium-quality cannabis products, could extend for another 24 months. Plus, cannabis derivatives, such as infused beverages, won't be given the green light by Health Canada until October.
But if Diageo does take the plunge, Aphria would be one of the most logical partnership opportunities. That's because Tom Looney, an addition to Aphria's board of directors late last year, was previously the president of Diageo's U.S. Spirits and Canada division. Looney is the perfect person to bridge the gap between both companies and bring Aphria's superior production under the same umbrella as Diageo's premier marketing and deep pockets.
Image source: Getty Images.
PepsiCo
Whereas Coca-Cola has made clear that it's on the outside looking in when it comes to marijuana, PepsiCo (NASDAQ: PEP) hasn't been as committal. Although the company did say it had no plans to enter the cannabis space in its late October quarterly conference call, CFO Hugh Johnston noted in a CNBC interview that cannabis was still on the table the same day as PepsiCo's earnings release. With sales growth stagnating over the past five years, it's pretty clear that PepsiCo needs a spark to reignite a floundering portfolio of beverages and snacks.
One possible solution could be to dive right in with a leading producer like Aurora, which has plain-as-day suggested that it wants to enter the infused beverage market. Aurora may not have been able to strike a deal with Coca-Cola, but PepsiCo would, in a rare instance, be able to one-up its primary rival by landing an equity deal, joint venture, or partnership with Canada's largest aggregate weed producer. Not to mention that Aurora's focus is on the higher-margin medical marijuana community, which is far more willing than adult-use consumers to buy derivative products.
PepsiCo could also take a safer route and dabble only in cannabidiol (CBD)-based products. CBD is the nonpsychoactive cannabinoid best known for its perceived medical benefits. Should it choose to go this route, a major, but more under-the-radar pot stock might be a smarter choice. For instance, OrganiGram Holdings, which is actively looking for a beverage partner, would probably cede all control of beverage development to a company like PepsiCo, which PepsiCo's management would probably appreciate given its marketing and product development expertise.
Image source: Getty Images.
Mondelez International
A third brand-name food and beverage company that looks to be ready to join the marijuana craze is Mondelez International (NASDAQ: MDLZ). As with Coca-Cola, Mondelez initially stated that it looked at the cannabis space but chose to keep its distance. Now, just months after its initial decision to stay on the sidelines, the company looks ready to be a prime participant.
In an interview on CNBC's Squawk on the Street earlier this month, Mondelez CEO Dirk Van de Put announced that the company is giving serious consideration to adding CBD to certain product lines, such as Chips Ahoy cookies, Cadbury chocolate, Nilla Wafers, and Nutter Butter cookies. Said Van de Put, "Yes, we're getting ready [to develop CBD-infused snacks], but we obviously want to stay within what is legal and play it the right way." Van de Put went on to add that adding CBD to its family brands, such as Oreo, may not be in the company's best interests.
Although Mondelez has an entire field of cannabis companies to consider for possible partnership opportunities, Aurora Cannabis may again make the most sense. Aurora hired billionaire activist investor Nelson Peltz in mid-March to act as its strategic advisor. The thing is, Peltz has hands-on experience in trying to extract shareholder value in the food and beverage industry, and currently owns a sizable position in Mondelez, with Trian Fund President Peter May on Mondelez's board of directors. Just as Looney is the perfect facilitator between Diageo and Aphria, Peltz is potentially a perfect intermediary between Mondelez and Aurora Cannabis.
10 stocks we like better than Mondelez International
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Mondelez International wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of March 1, 2019
Sean Williams has no position in any of the stocks mentioned. The Motley Fool owns shares of Molson Coors Brewing. The Motley Fool recommends Constellation Brands, Diageo, HEXO., and OrganiGram Holdings. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo First up is alcoholic beverages maker Diageo (NYSE: DEO), which hasn't been shy about its interest in the cannabis industry. In early August, the market was surprised when Molson Coors Brewing announced that it would be forming a 57.5%-42.5% joint venture with Quebec-based grower HEXO to develop nonalcoholic cannabis-infused beverages under the name Truss. Aside from getting a finger-wag from large shareholder Warren Buffett, Coca-Cola has reiterated on numerous occasions since the fourth quarter that it's looked at the pot industry, but currently has no intention of seeking a partner or creating its own products.
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Diageo First up is alcoholic beverages maker Diageo (NYSE: DEO), which hasn't been shy about its interest in the cannabis industry. Brand-name partnership opportunity pick up for pot stocks The potential of partnering a brand-name company with a world-class cannabis stock was first noted in October 2017, when Modelo and Corona beer maker Constellation Brands made the first of what would become three investments into Canopy Growth. Mondelez International A third brand-name food and beverage company that looks to be ready to join the marijuana craze is Mondelez International (NASDAQ: MDLZ).
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Diageo First up is alcoholic beverages maker Diageo (NYSE: DEO), which hasn't been shy about its interest in the cannabis industry. Brand-name partnership opportunity pick up for pot stocks The potential of partnering a brand-name company with a world-class cannabis stock was first noted in October 2017, when Modelo and Corona beer maker Constellation Brands made the first of what would become three investments into Canopy Growth. Coca-Cola may be out, but these food and beverage companies may want in on the cannabis craze About the only company we know that won't be is Coca-Cola (NYSE: KO).
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Diageo First up is alcoholic beverages maker Diageo (NYSE: DEO), which hasn't been shy about its interest in the cannabis industry. Brand-name partnership opportunity pick up for pot stocks The potential of partnering a brand-name company with a world-class cannabis stock was first noted in October 2017, when Modelo and Corona beer maker Constellation Brands made the first of what would become three investments into Canopy Growth. The bigger question is: Which brand-name food and beverage companies are next to seek out a partner in the marijuana industry?
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2019-05-13 00:00:00 UTC
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10 ‘Buy-and-Hold’ Stocks to Own Forever
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https://www.nasdaq.com/articles/10-buy-and-hold-stocks-to-own-forever-2019-05-13
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[Editor’s note: This story was previously published in February 2019. It has since been updated and republished.]
Investing to “buy and hold” is trickier than it looks. The increasing pace of technological change means even the most successful, dominant companies have to continually adapt to keep up. Industries like energy, real estate and even consumer products are facing potentially significant long-term changes going forward. In any era, amassing a collection of retirement stocks simply by buying the best companies and holding them for years can be a risky endeavor.
General Motors (NYSE:) was a classic “widows and orphans” stock until last decade, when GM wound up going bankrupt. United States Steel (NYSE:) once was a pillar of corporate America and a buy-and-hold stock. GM shares basically haven’t moved in a quarter of a century. Polaroid and Eastman Kodak were once blue-chip stocks. Both went bankrupt as cameras changed from film to digital.
But there still are stocks to buy and hold out there that can last forever, while offering dividend income along the way.
Here are ten such retirement stocks to hold forever.
Source: Shutterstock
Bank of America (BAC)
Dividend Yield: 2%
It might seem strange to open the list with Bank of America (NYSE:). After all, we’re only a bit more than a decade on from the financial crisis. During that crisis, BofA acquisition Countrywide Financial blew up in spectacular fashion, after pioneering many of the risky tactics that led to the bubble and subsequent bust.
But this is a different BofA.
Net consumer charge-offs hit a decade-long low last year. Its performance on credit metrics is strong. Government regulations have been criticized as slowing growth — but they’ve undoubtedly lowered risk as well, even if observers might argue that a better balance is needed.
No less than , through his Berkshire Hathaway Inc. (NYSE:, NYSE:BRK.B). And the Oracle of Omaha is fond of saying that his favorite holding period is “forever.”
That seems likely true for BAC stock as well.
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Diageo (DEO)
Dividend Yield: 1.6%
Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by Diageo (NYSE:) are well-positioned to adapt to shifting tastes.
Diageo owns classic brands like Johnnie Walker whisky, Tanqueray gin, Smirnoff vodka, and Harp and Guinness beer, among many others. What most have in common is a timeless quality and worldwide brand recognition. As a result, while beverage giants like Coca-Cola (NYSE:) and Anheuser Busch InBev (NYSE:) have struggled with earnings growth, Diageo grew net income by 13.5% in fiscal 2018 and expects consistent growth going forward.
Yet with a forward multiple of 25, and with a dividend yield approaching 2%, Diageo stock isn’t all that dearly valued. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
Source:
Medtronic (MDT)
Dividend Yield: 2.3%
In this day and age, the U.S. healthcare market in particular seems potentially volatile. Concerns about increased spending and political battles over the Affordable Care Act create more questions than answers.
But even with that uncertainty, Medtronic (NYSE:) isn’t going anywhere. The company’s devices are an integral part of modern medicine, ranging from pacemakers to stents to bone grafts to imaging systems.
Even the risks involved in the sector look priced into MDT. Medtronic’s days of double-digit annual growth may well be behind it, but it’s not finished increasing earnings or dividends. MDT stock likely isn’t finished rising, either.
Source: Shutterstock
NextEra Energy (NEE)
Dividend Yield: 2.6%
Utility stocks are among the most common safe, buy-and-hold stocks. NextEra Energy (NYSE:) is now the largest electric utility in the U.S. by market capitalization. That might actually be the only problem with NEE stock.
NextEra shares gained 10.5% year-to-date, and trades just off record highs. Potential valuation concerns aside, NextEra looks like a winner. It serves customers in the southern Florida region, still one of the nation’s fastest-growing areas. A 21x forward P/E multiple is high for the space but not outlandishly so. And a 2.6% dividend yield provides income along the way.
Investors looking for value in the space might look for a smaller play like cheaper Dominion Energy (NYSE:). But it’s usually worth paying for quality, and NextEra Energy looks like one of the best utility stocks out there.
Source:
McCormick & Company
Dividend Yield: 1.7%
McCormick & Company (NYSE:) is another quality company whose valuation might spook some investors. But MKC stock very rarely is offered cheaply.
The company’s market leadership in spices and seasonings provides both an impressive moat and protection against economic downturns. MKC stock did dip after the company sauce from Reckitt Benckiser (OTCMKTS:) at a price that looked a bit high to many investors. But MKC has recovered those gains and then some.
Top-line growth for McCormick likely isn’t going to be explosive, but it will be steady. The same has been true of MKC stock, which has returned an average of 13% a year over the past decade, including dividends.
With continuous cost-cutting initiatives, the contribution from the acquired brands and organic growth (and growth in organic products), MKC still should be able to provide double-digit annual returns going forward as well.
Source: Shutterstock
Allstate Corp
Dividend Yield: 2.1%
Allstate Corp (NYSE:) long has used the tagline, “You’re in good hands,” and it’s true for Allstate investors as well. ALL stock has almost quadrupled from late-2011 lows. And there could be more upside to come.
After all, Allstate isn’t particularly expensive, trading at a 13.75 P/E.
Once any short-term worries subside, ALL should resume its march upward.
Source: Shutterstock
International Flavors & Fragrances (IFF)
Dividend Yield: 2.21%
International Flavors & Fragrances (NYSE:) is a company most consumers encounter every day without knowing it and many investors aren’t exactly hip to it, either.
As its name suggests, the company develops flavors & fragrances across 13 categories, including cosmetics, perfumes, beverages and sweet flavors. Sales and earnings have increased consistently and so has IFF’s share price. At a 41.75 P/E, IFF does look a bit pricey. But, as with McCormick and other stocks on this list, investors should pay for quality.
IFF’s hidden, but key role, in so many industries, gives it a great deal of protection against both competition and macro factors. Acquisitions and a growing cosmetic additive business both provide room for growth.
Consumers may not know IFF, but investors should.
Source: Shutterstock
Lamb Weston
Dividend Yield: 1.15%
Lamb Weston (NYSE:) was spun off from Conagra Brands (NYSE:) last year. Lamb Weston is the No. 1 potato producer in the United States. In fact, it manufactures the well-known fries at McDonald’s (NYSE:), among other restaurant chains.
Lamb Weston also has a consumer business (including a small segment that manufactures frozen vegetables), while serving restaurants of all sizes. Health concerns might seem a long-term headwind against the business, but growth has been steady for years, and margins continue to improve.
LW is targeting international markets for growth, as French fries have much more limited penetration, while international audiences generally are intrigued by Americanized products.
Despite growth and leading market share, LW stock isn’t particularly cheap, trading at about 19 times next year’s earnings. The company did pick up a fair amount of debt in the CAG spinoff. But it’s paying that debt down, which should lower interest expense and boost cash flow going forward.
With many similar stocks trading at much higher multiples, LW seems to have room for upside. And international growth should offset any health-related concerns in the U.S., should they arise. America’s love affair with French fries isn’t going to suddenly end, and that should ensure years of stability for Lamb Weston at least.
Source: Shutterstock
Fortune Brands (FBHS)
Dividend Yield: 1.67%
Investors are commonly advised to diversify their portfolio. Fortune Brands Home & Security (NYSE:) has done just that. The company operates in four segments: Cabinets, Plumbing, Doors, and Security. Among its well-known brands are Moen in plumbing, and MasterLock in security.
FBHS is more of a cyclical stock than most on this list, and the company no doubt has benefited from the steady, if slow, housing recovery in the U.S. But the company’s products also generate relatively stable replacement demand, and a 1.67% dividend yield provides modest, but growing, income.
Fortune Brands has been an impressive company since its founding and a solid stock since its 2011 IPO. There may be a bit more volatility here, but that’s a worthwhile price to pay for long-term investors. There’s enough value in Fortune Brands to ride out any market jitters.
Source: Shutterstock
Dividend Yield: 1.81%
Republic Services (NYSE:) is a bit smaller and likely a lot less well-known than rival Waste Management (NYSE:). But in this case, that’s not necessarily a bad thing.
Republic Services has outgrown its larger competitor in both sales and earnings over the past five years. RSG stock has modestly outperformed WM over the same period as well. Investors appear to believe that will continue, as Republic Services is valued a bit higher than Waste Management, at least based on forward earnings multiples.
Both RSG and WM are solid long-term plays. Contracted revenue and steady demand should support both companies for years to come. There’s room for further acquisitions in a relatively fragmented space. Republic Services gets the nod here due to slightly better growth and more room for margin improvement.
But investors looking for safe, stable growth can’t go wrong with either RSG or WM.
As of this writing, Vince Martin was long MKC.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Source: Diageo (DEO) Dividend Yield: 1.6% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. During that crisis, BofA acquisition Countrywide Financial blew up in spectacular fashion, after pioneering many of the risky tactics that led to the bubble and subsequent bust.
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Source: Diageo (DEO) Dividend Yield: 1.6% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. Source: Shutterstock NextEra Energy (NEE) Dividend Yield: 2.6% Utility stocks are among the most common safe, buy-and-hold stocks.
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Source: Diageo (DEO) Dividend Yield: 1.6% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. Source: McCormick & Company Dividend Yield: 1.7% McCormick & Company (NYSE:) is another quality company whose valuation might spook some investors.
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Source: Diageo (DEO) Dividend Yield: 1.6% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky. Source: Shutterstock NextEra Energy (NEE) Dividend Yield: 2.6% Utility stocks are among the most common safe, buy-and-hold stocks.
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2019-05-08 00:00:00 UTC
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The 18 Best Consumer Staples Stocks to Invest In
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Consumer staples stocks have largely fallen off the radar in recent months. Investors have been much more focused on growth as corporate earnings have pleasantly surprised, the U.S.-China trade spat showed signs of hope and the Federal Reserve decided to keep interest rates steady.
Naturally, these more defensive companies haven't been especially red-hot of late. Consumer staples stocks have lagged the marketwide bounce that took shape beginning in late December. But with many other sectors starting to feel the weight of unwieldy gains, and with China trade talks yet again hitting turbulence, the sector might be ready to heat up again.
Steve Azoury, founder of financial planning firm Azoury Financial, says, "Consumer staples, the products that people use every day, will always be a big part of America's economy." "The trick," he adds, is identifying the companies that "will stay innovative and update their products and services to excite their customers, and thus the stock prices for investors."
Here are 18 of the best consumer staples stocks to invest in at the moment. While some of these are blue-chip stocks that should ring a bell, others are lesser-known companies that serve as the backbone of brands you may be more familiar with. Almost all of them provide varying levels of dividend income.
SEE ALSO: 57 Dividend Stocks You Can Count On
Altria Group
Market value: $99.0 billion
Dividend yield: 6.0%
Cigarette smoking is a fading vice. Smoking cessation messaging appears to be effective. In general, people say they're more health-minded now than they've ever been.
And yet, there it is. Cigarette maker Altria Group's (MO, $52.94) operating income continues to be in a longer-term uptrend, from $7.6 billion in 2014 to $9.5 billion in 2018. It's not eye-opening, and it hasn't been perfectly consistent. But Altria is making progress.
There will always be headwinds, and in fact, two new stumbling blocks have surfaced of late. Sen. Mitch McConnell (R-Ky.) recently pledged to introduce legislation that would mandate a nationwide minimum smoking age of 21. While the senator's bill may or may not become law, it still points to a growing social concern that eventually could bite off a key demographic for the cigarette giant.
Separately, vaping (the use of electronic cigarettes that produce an inhalable vapor) is proving a compelling alternative to traditional tobacco usage, in that it at least seems to be a safer choice than inhaling smoke. But Altria has waded into the vaping arena itself. Late last year, it took on a one-third stake in e-cigarette outfit Juul. It enjoys a massive 75% e-cig market share, and it's a huge hit with the all-important 18-to-21-year-old crowd.
There will come a time when Altria can't justify supporting unhealthy habits, but that time is well beyond the horizon. Until then, it provides some stability and one of the largest yields among blue-chip consumer staples stocks.
SEE ALSO: 20 of Wall Street's Newest Dividend Stocks
Bunge
Market value: $7.1 billion
Dividend yield: 4.0%
You can look at every shelf in your local grocery store and not find a single Bunge (BG, $49.98) label. But you would absolutely notice if the company were to suddenly shut down. Bunge is one of the world's bigger producers of grains, oilseed and sugar, supplying food producers with much-needed ingredients.
That business does fluctuate from time to time. Although the world always eats a fairly consistent amount of food per capita, commodity prices can waver, and volatile costs such as transportation and delivery can make the bottom line tricky to handicap.
For instance, Bunge earned an adjusted profit of $1.57 per share in 2018 that was 76% better than 2017's total. But that included a fourth quarter in which earnings dropped from 67 cents per share in the year-ago period to just 8 cents. In the short-term, Bunge can be a very difficult company to handicap.
But investors with a true long-term view can appreciate that, given enough time, Bunge bears fruit. And its mostly reliable cash flow drives a healthy dividend of 4%.
One last wrinkle: Morningstar analyst Seth Goldstein believes new CEO Gregory Heckman, who was elevated after operating as acting chief for three months, might be a precursor to stepped-up M&A activity, including the possibility of Bunge selling itself.
SEE ALSO: 10 High-Yield Monthly Dividend Stocks and Funds to Buy
Campbell Soup
Market value: $11.5 billion
Dividend yield: 3.7%
Campbell Soup (CPB, $38.23) is one of a large handful of food-focused consumer staples stocks that got caught in a perfect storm of headaches beginning in 2016. Stymied by rising commodity costs, increasing shipping costs, vertical integrations of distribution partners and shifting consumer tastes, CPB stock fell from a 2016 high near $68 to a low around $32 earlier this year.
The iconic company appears to have finally put its finger on the pulse of how shoppers think and make food purchases, however. Simultaneously, it has overhauled its operation for maximum efficiency to control costs.
Part of that overhaul includes sales of brands that aren't an ideal fit. Campbell has sold fresh-foods brand Bolthouse Farms to a private-equity firm, and the company was in talks with Mondelez (MDLZ) to sell off its international business. The organization now seems to see it has to shrink to thrive.
At the same time, activist investors that can and will drive value-building change are on board - literally. Daniel Loeb's Third Point fund took on a sizable stake in the company in late 2018, and earlier this year parlayed that into two board seats. Loeb's interest, and now his influence, bodes well for CPB. It's just a matter of making the right tweak.
SEE ALSO: 33 Ways to Get Higher Yields (Up to 12%!)
Carter's
Market value: $4.6 billion
Dividend yield: 2.0%
Some investors will readily recognize Carter's (CRI, $101.52) as the owner of baby apparel labels such as OshKosh B'gosh, Genuine Kids, Skip Hop and the namesake Carter's.
Carter's might look and feel like a cyclical apparel name, and some classifying systems see it that way. But there's more than meets the eye here.
While the so-called retail apocalypse has reached deep into the retail industry and upended thousands of brick-and-mortar stores, and the apparel industry in particular, Carter's has proven a stark exception to that norm. New parents and grandparents tend to buy new baby and toddler clothes even when those parents and grandparents are unwilling (or unable) to buy new clothes for themselves.
The proof is in the numbers. Carter's has reported a year-over-year decline in quarterly revenue merely twice since 2010 - a spectacular performance that would make most retailers green with envy. Operating income isn't as consistent but is on a growth track all the same thanks to both savvy acquisitions and smart use of e-commerce.
The market remains firm too. Although the number of babies being born per capita in the United States is fading, the actual number of births per year in the U.S. is holding reasonably steady at just under 4 million.
SEE ALSO: 50 Top Stocks That Billionaires Love
Clorox
Market value: $18.9 billion
Dividend yield: 2.6%
Clorox (CLX, $148.46) has reported some degree of year-over-year sales growth every quarter since mid-2014. Some of that growth has been lackluster to be sure, but the consistency is impressive all the same. Per-share profit growth hasn't been quite as consistent. Still, the $6.26 in profits it earned in the year ended June 30, 2018, was 17% better than its fiscal 2017 sum.
Clorox (the company) isn't just bleach. It sells sanitizing wipes under the same brand name, but it's also the company that makes and markets Glad trash bags, Liquid Plumr drain de-clogger, Fresh Step cat litter and Kingsford charcoal, just to name a few products in its portfolio. It's a boring lineup, but a lineup full of products that consumers must purchase again and again. That's why sales and profit growth alike have been consistent for years.
Analysts don't have Clorox among their favorite stocks to invest in right now. In fact, JPMorgan recently downgraded CLX to an "Underweight" rating (equivalent of "Sell"), with analyst Andrea Teixeira suggesting Nielsen sell-through data indicated a sales slowdown that could reflect a developing "multi-quarter issue." The analyst community as a whole rates Clorox as a less-than-thrilling "Hold."
But those same analysts still predict sales and profit growth out of the consumer staples stock going forward. And CLX shares haven't stopped making long-term forward progress, either, despite a wave of downgrades in November.
SEE ALSO: The 25 Best Blue-Chip Stocks to Buy Now (According to Hedge Funds)
Costco
Market value: $105.7 billion
Dividend yield: 1.1%
Club-based warehouse retailer Costco (COST, $240.18) operates 770 locations and is hands-down the category leader as well as the pacesetter in this sliver of the industry.
Shares aren't cheap, even by retailing standards. The stock trades at more than 30 times its trailing 12-month profits, and the forward-looking price-to-earnings ratio of 28.1 times analysts' expectations isn't much more compelling.
But Costco is a bulldozer, hanging with rivals ranging from Walmart (WMT) to even Amazon.com (AMZN). Last fiscal year's worldwide gasoline-adjusted same-store sales growth weighed in at an impressive 6.8%, while total revenue including membership fees was up nearly 10% in fiscal 2018. Analysts are modeling slower growth this year, but those same analysts frequently underestimate the retailer.
Regardless, Costco hasn't reported lower year-over-year quarterly revenue in a decade, and per-share quarterly earnings dips are a rarity not seen since early 2017.
Monetta Financial Services founder and portfolio manager Bob Bacarella says Costco "has a number of competitive advantages such as low prices, economics of scale compared to smaller retailers, can easily adjust to changes in customer consumption patterns, has an online delivery platform, an and innovative supply chain/inventory system." Bacarella also is impressed by the way Costco continues to increase same-store sales while other retailers are getting "Amazoned."
SEE ALSO: 10 Energy Stocks and Funds to Buy for Dividends AND Growth
Diageo
Market value: $99.7 billion
Dividend yield: 1.6%
You might not know the name Diageo (DEO, $167.50), but you likely know at least one of its brand names. Diageo is the company behind Guinness beers, Johnnie Walker Scotch whiskies, Smirnoff vodkas, Captain Morgan rums, Don Julio tequilas and several other spirits and wines. In fact, it's one of the world's largest distillers.
While perhaps not mankind's most flattering reality, the fact of the matter is, booze always sells, and it usually grows, which makes liquor companies popular stocks to invest in. Earlier this year, the Distilled Spirits Council announced that in 2018, even with steep tariffs mucking up international trade, American sales of spirits improved for a ninth straight year. Supplier revenue grew 5.1% year-over-year to $27.5 billion, and volumes grew 2.2% to 231 million cases. And it's not just spirits and liquor sales that are growing - U.S. spending on alcoholic beverages of all types improved 5.1% last year.
Diageo has been and continues to reshape itself to most effectively ride the industry's rising tide too. Last year it announced the sale of 16 value-priced brands including Popov, Goldschlager, Parrot Bay and Peligroso to privately held rival Sazerac so it can better focus on its more profitable premium brands.
The company also is wisely adapting to the experience-minded demands of millennials, who will be the Diageo's core customers for years to come.
SEE ALSO: 5 Sin Stocks You Can Feel Good About
Foot Locker
Market value: $6.1 billion
Dividend yield: 2.8%
There was a point in time when it was laughable to consider sports shoe specialist Foot Locker (FL, $54.24) a consumer staples name. It was an apparel retailer, for one, and the high-end sneakers it peddled were a luxury purchase and a fashion statement. As such, they were highly subject to economic ebbs and flows.
Consumers have changed, however, and the marketplace with it.
"Fashion and athletic brands have become a way of life. It is being used not just for sports but everyday wear," Piper Jaffray analyst Erinn Murphy, who describes sneaker brands as "social currency," recently told Yahoo Finance. Murphy continued to say that "72% of females named an athletic brand as their favorite brand. Going back to our survey 10 years ago, that number was in the low 20% range."
Piper Jaffray's spring 2019 "Taking Stock with Teens Survey" sheds more light on the matter, determining the average teenager owns eight pairs of sneakers, with at least 30% of that demographic purchasing a new pair every month.
Foot Locker has become the supplier of choice for athletic footwear fans, too. After a glut of celebrity-endorsed basketball shoes inspired the opening of far too many stores that ultimately had to be closed, Foot Locker is a tougher and savvier survivor. Aside from stepping up its e-commerce game, the retailer is innovating. Earlier this year it shelled out $2 million to acquire the Pensole Footwear Design Academy in an effort to develop exclusive products for the retailer's stores.
Foot Locker isn't to be confused with companies that actually sell toilet paper and canned goods that must be consumed no matter what the economy is doing. In a full-blown recession, all bets are off. But for now, customers are treating Foot Locker differently than almost all other apparel retailers.
SEE ALSO: 9 High-Yield Dividend Stocks That Deserve Your Attention
Hain Celestial
Market value: $2.5 billion
Dividend yield: N/A
Hain Celestial (HAIN, $23.70) is one of the most health-minded consumer staples stocks you can invest in. This packaged-foods company's brands include BluePrint Organic, Walnut Acres, Candle Café vegan foods and Bearitos, plus about a dozen others.
Hain and its stock were unstoppable through the middle of 2015. But the company may have pushed its growth agenda a bit too aggressively for too long. American Century Investments vice president and senior portfolio manager Jeffrey John says Hain's "long-term roll-up strategy left the company with a bloated SKU count, levered balance sheet and declining returns."
That is one key reason HAIN shares lost more than three-fourths of their value between 2015's peak and 2018's low.
The foreseeable future looks much brighter, though. American Century's John goes on to explain "the new management team is focused on optimizing its product portfolio by investing behind brands with greatest growth opportunities and those with highest profit potential while winnowing brands lacking profitability and scale - a shrink-to-grow strategy." The shift, John believes, should improve the return on the company's investment as well as boost free cash flow that can be used to whittle down debt.
Hanesbrands
Market value: $6.4 billion
Dividend yield: 3.4%
Hanesbrands (HBI, $17.75) is hardly just the Hanes brand anymore. Playtex, Bali, Champion, L'eggs and Maidenform are among other labels in the Hanesbrands family. None may seem like consumer staples, but much like food and cleaning supplies, consumers regularly replace worn-out underwear and T-shirts.
Hanesbrands' recurring revenue machine isn't perfectly bulletproof. Last year's earnings slumped in earnest for the first time since 2008's economic debacle, driven by a combination of competition, the continuation of a retail apocalypse that's still claiming key distributors such as Sears (SHLDQ) and ongoing tariff wars. Although Hanesbrands made a point of finding non-Chinese suppliers of textiles before tariffs went into place, no company has been completely immune to the ripple effect.
Hanesbrands has been solidly resilient in the bigger picture, though. Analysts still expect the company to renew earnings growth this year, then continue expanding in 2020. The estimates are modest, but that's OK - shares are modestly priced, too, at less than 10 times next year's profit expectations.
That outlook may underestimate what's in store. Hanesbrands has turned the heat up on its licensed apparel effort, recently securing a semi-exclusive deal to supply the University of North Carolina at Chapel Hill with school-related clothing, following March's announcement of an exclusive agreement with the University of Cincinnati.
SEE ALSO: 11 Dividend Growth Stocks Flying Under the Radar (For Now)
JM Smucker
Market value: $14.2 billion
Dividend yield: 2.7%
JM Smucker (SJM, $125.09) is best known for its jams and jellies, but it's so much more than that now. Smucker also owns Jif peanut butter, Crisco, Folgers coffee and even Kibbles 'n Bits pet food, just to name a few.
The diverse line of repeatedly purchased goods hasn't quite made JM Smucker's financial metrics immune to setbacks. Like most food companies, this one has felt the pinch of higher freight costs, rising commodity costs and the impact of a lingering tariff war.
Smucker has proven itself remarkably resilient all the same, however, with revenue as well as earnings maintaining long-term growth despite the occasional short-term bump in the road. For perspective, the company's trailing 12-month revenue of $7.72 billion was only $7.36 billion a year earlier. Operating income of $1.08 billion earned during the past four quarters is better than the $930 million earned a year earlier.
Smucker has done well with acquisitions too, quickly extracting organic growth from its 2015 deal to purchase Big Heart Pet Brands, and the 2013 purchase of organic, gluten-free food company Enray.
The jelly giant is simply a well-run outfit that also sports a respectable yield of 2.7%. That dividend has been growing on an annual basis every year for more than two decades.
Kellogg
Market value: $19.5 billion
Dividend yield: 3.9%
Kellogg (K, $57.15) is best known for breakfast cereals such as Corn Flakes and Rice Krispies. But those products are only a fraction of the food giant's portfolio. Keebler cookies, Pringles potato chips, Eggo waffles and Famous Amos are also part of the Kellogg family, along with a slew of other products most consumers would readily recognize.
Granted, some of those brands are about to be officially shed. Famous Amos, Murray's, Keebler and Mother's are being sold to Ferraro Group, essentially getting Kellogg out of the cookie business. It's a smart strategic shrinking, however. CEO Steven Cahillane explained earlier this month the divestiture would lead to "reduced complexity, more targeted investment and better growth."
What's left behind is a smaller but better cash-generating machine.
When the possibility of the sale first surfaced in November, Greg Wank - the food-and-beverage lead at accounting outfit Anchin, Block & Anchin - wrote, "Kellogg's is wise to focus on morning foods (cereal) and snacks which probably includes bars but would not include cookies and sweets. They appear to have made the decision that cookies are not core to their future and they want to raise capital from selling those assets to reinvest and realign their cereal and healthier snack business."
Meanwhile, investors are being paid nearly 4% annually for their patience.
SEE ALSO: 12 Dividend Stocks That Hedge Funds Love
Kimberly-Clark
Market value: $43.4 billion
Dividend yield: 3.3%
Paper-product specialist Kimberly-Clark (KMB, $126.18) - responsible for brands such as Huggies, Kotex and Kleenex - is anything but an analyst favorite among consumer staples stocks. The pros collectively rate it a weak "Hold," and the consensus price target near $111 is well below the stock's present price. This crowd hasn't appeared interested in adjusting its calls either, despite the unexpected strength that has buoyed shares since the middle of last year.
But a few pros are starting to come around. Perhaps they're realizing that Kimberly-Clark is better-positioned for the future than it seemed until recently.
Macquarie analyst Caroline Levy is one of the newest believers, upgrading KMB from "Neutral" (equivalent of "Hold") to "Outperform" (equivalent of "Buy") this month. She explained, "Price/mix is coming in better than expected YTD, and given much easier sales comparisons for the rest of the year, a solid innovation pipeline and effective marketing/higher adspend (especially on digital), we are more confident in the sales growth outlook for KMB."
If the company didn't achieve something close to Levy's organic revenue growth forecast of 4% for 2019, it would come as a small surprise. Although Kimberly-Clark has logged some disappointing quarters since 2016, marked by declining sales and earnings, it still raised the bar on investors' behalf earlier this year by guiding for organic sales growth of 2%.
Kroger
Market value: $20.6 billion
Dividend yield: 2.2%
Kroger (KR, $25.77) admittedly faces challenges that were unthinkable just a few years ago. Chief among them: Amazon.com not only sells groceries online and via its Whole Foods arm, but it's also planning to open grocery stores that will compete head-to-head with Kroger on price. In the meantime, deliveries and curbside pickup made the company's competitors at least a bit easier to access.
But Kroger is past the initial shell shock of entering the modern, digital era of consumerism. Now, it's positioned to reboot itself as one of the top consumer staples names it had been for decades.
One of Kroger's overdue initiatives has been the use of technology to improve the shopping experience. Among the coolest of its developments is its EDGE (Enhanced Display for Grocery Environment) shelf display system, which lets shoppers use their smartphones to gather a wealth of information about a particular product using their smartphones. The EDGE platform even guides a shopper to an in-store product. And importantly, it sets the stage for ad revenue.
In the meantime, easier-to-implement measures are being taken. Curbside pickup is now available at 1,250 locales, and 1,200 of its 2,800 stores now offer delivery options. These and a slew of other efforts have analysts calling for a renewal of the grocer's long-term history of steady growth.
SEE ALSO: 11 Dividend Stocks With 55 or More Years of Payout Growth
Lamb Weston
Market value: $10.0 billion
Dividend yield: 1.2%
Most investors likely have consumed a Lamb Weston (LW, $68.25) product and not even realized it. This hyper-focused consumer staples stock is one of the top suppliers of potato products to restaurants and retailers across the globe, including supplying 80 million of the world's daily servings of French fries.
Like other food outfits, LW has faced recent turbulence on multiple fronts. Case in point: Potato prices in the U.S. are up modestly from 2016's levels, ending a downtrend that benefited the company. Potato prices in Europe almost doubled in 2018 in response to a severe shortage. That scenario has left Lamb Weston with some tough choices to make, all of which somehow crimp profits.
Even beyond rising potato costs, the company fears inflation of other costs. Within its first-quarter report was a full-year outlook in which Lamb Weston cautioned that results may "moderate as we begin to lap strong prior year results, face increased cost inflation, ramp up investments in operating, sales and product innovation capabilities."
Take the warnings with a grain of salt. Lamb Weston may merely be managing expectations. The company has grown the top and bottom lines in every quarter since its spinoff from Conagra Brands (CAG) in late 2016. The fact that potatoes are the United States' most popular vegetable, with two-thirds of them being consumed as French fries, probably has a lot to do with that dependability.
Newell Brands
Market value: $6.8 billion
Dividend yield: 5.8%
You may better recognize the name Newell Brands (NWL, $15.96) by pairing it up with its sister brand Rubbermaid, but the company is so much more than just handy containers now. Newell makes products with Coleman, Crock-Pot, Elmer's Glue, Mr. Coffee, Yankee Candle, Graco and Sharpie labels too.
It's a quintessential collection of products that consumers use, break, throw away and then replace in perpetuity, often without even realizing they're doing it.
Newell has been one of the worst consumer staples stocks to invest in over the past couple years, however. The company made a major acquisition in buying out Jarden in 2016, but its top line has been shrinking regularly since the deal was done. Operating income has been deteriorating rather consistently for a decade. For whatever reason, things just haven't clicked. Shares have lost roughly two-thirds of their value since this point in 2017.
Newell isn't a long-reliable consumer staples stock, then ... but it is a potential comeback play.
Longtime CEO Michael Polk announced in March that he would retire at the end of the second quarter. While few leadership transitions are easy, changes clearly are needed. Polk's exit is an opportunity to inject new life into several well-respected product lines that simply need some help. In the meantime, activist investors including Carl Icahn and Starboard Value's Jeffrey Smith are reportedly kicking the tires, suggesting faith in the potential of a turnaround. Analysts also are finally calling for stability in its operational results, which typically occurs at key pivot points.
SEE ALSO: 8 Stocks That Will Have You Investing Like Buffett
PepsiCo
Market value: $157.3 billion
Dividend yield: 3.0%
Sugary soda drinks are falling out of favor as consumers become increasingly health-conscious. Fortunately, PepsiCo (PEP, 112.24) has expanded well past carbonated beverages. Aside from Pepsi, Lipton, Gatorade and Sobe drinks, among others, PepsiCo also has a sprawling snacks division that includes Quaker oat products, Lay's potato chips, Cap'n Crunch cereal, Sabra dips and more.
While not bulletproof, that diverse product mix has helped smooth out potentially wide swings in revenue. Operating income growth has been largely reliable, too.
And a long-missing ingredient may have just been added to the mix, ushering PEP to the head of the class among consumer staples stocks. Relatively new CEO Ramon Laguarta, who took the helm from Indra Nooyi a couple of quarters ago, is willing to spend more on advertising than Nooyi was. He also has streamlined operations and taken healthier snacks and drinks more seriously than his predecessor did.
It's still the early innings of the Laguarta era, but he's off to an encouraging start. Last quarter's organic revenue grew 5.2%, and sales of $12.9 billion handily topped expectations of $12.7 billion. Per-share profits of 97 cents also beat estimates easily.
Procter & Gamble
Market value: $262.6 billion
Dividend yield: 2.9%
Procter & Gamble (PG, $104.70) once was one of the most beloved consumer staples stocks to invest in, but size and age has caught up with it. The advent of the internet - where P&G missed a key opportunity - didn't help either, by virtue of making it easy for niche brands and open-minded consumers to find one another. Dollar Shave Club is one such example.
Relatively new CEO David Taylor, however, has pointed the staples giant in the right direction again by rethinking everything from the top down. "By trimming products in the pet food and bleach business, they are now concentrating on their core products of Tide laundry detergent, Bounty paper towels and Pampers," explains Azoury Financial's Steve Azoury.
That refocus, which included the divestiture of beauty brands like Clairol and Covergirl, ultimately rekindled a long-term advance for the stock by improving profits even though asset sales crimped revenues beginning in 2014.
More of the same might be on the way, too, driving fresh dividend growth for income-minded investors. Azoury points out the company recently raised its dividend for a 63rd consecutive year, and better still, can afford it. The new quarterly payment of 74.6 cents per share annualizes at $2.98, which is only about two-thirds of this year's projected profits.
James Brumley was long FL as of this writing.
SEE ALSO: The Kiplinger Dividend 15: Our Favorite Dividend-Paying Stocks
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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SEE ALSO: 10 Energy Stocks and Funds to Buy for Dividends AND Growth Diageo Market value: $99.7 billion Dividend yield: 1.6% You might not know the name Diageo (DEO, $167.50), but you likely know at least one of its brand names. In fact, JPMorgan recently downgraded CLX to an "Underweight" rating (equivalent of "Sell"), with analyst Andrea Teixeira suggesting Nielsen sell-through data indicated a sales slowdown that could reflect a developing "multi-quarter issue." Monetta Financial Services founder and portfolio manager Bob Bacarella says Costco "has a number of competitive advantages such as low prices, economics of scale compared to smaller retailers, can easily adjust to changes in customer consumption patterns, has an online delivery platform, an and innovative supply chain/inventory system."
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SEE ALSO: 10 Energy Stocks and Funds to Buy for Dividends AND Growth Diageo Market value: $99.7 billion Dividend yield: 1.6% You might not know the name Diageo (DEO, $167.50), but you likely know at least one of its brand names. SEE ALSO: 10 High-Yield Monthly Dividend Stocks and Funds to Buy Campbell Soup Market value: $11.5 billion Dividend yield: 3.7% Campbell Soup (CPB, $38.23) is one of a large handful of food-focused consumer staples stocks that got caught in a perfect storm of headaches beginning in 2016. Monetta Financial Services founder and portfolio manager Bob Bacarella says Costco "has a number of competitive advantages such as low prices, economics of scale compared to smaller retailers, can easily adjust to changes in customer consumption patterns, has an online delivery platform, an and innovative supply chain/inventory system."
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SEE ALSO: 10 Energy Stocks and Funds to Buy for Dividends AND Growth Diageo Market value: $99.7 billion Dividend yield: 1.6% You might not know the name Diageo (DEO, $167.50), but you likely know at least one of its brand names. SEE ALSO: 9 High-Yield Dividend Stocks That Deserve Your Attention Hain Celestial Market value: $2.5 billion Dividend yield: N/A Hain Celestial (HAIN, $23.70) is one of the most health-minded consumer staples stocks you can invest in. SEE ALSO: 12 Dividend Stocks That Hedge Funds Love Kimberly-Clark Market value: $43.4 billion Dividend yield: 3.3% Paper-product specialist Kimberly-Clark (KMB, $126.18) - responsible for brands such as Huggies, Kotex and Kleenex - is anything but an analyst favorite among consumer staples stocks.
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SEE ALSO: 10 Energy Stocks and Funds to Buy for Dividends AND Growth Diageo Market value: $99.7 billion Dividend yield: 1.6% You might not know the name Diageo (DEO, $167.50), but you likely know at least one of its brand names. That's why sales and profit growth alike have been consistent for years. Smucker has done well with acquisitions too, quickly extracting organic growth from its 2015 deal to purchase Big Heart Pet Brands, and the 2013 purchase of organic, gluten-free food company Enray.
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2019-05-03 00:00:00 UTC
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6 Safe Dividend Stocks to Buy Now
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DEO
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https://www.nasdaq.com/articles/6-safe-dividend-stocks-to-buy-now-2019-05-03
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[Editor’s note: This story was previously published in February 2019. It has since been updated and republished.]
Even with the China-U.S. trade war appearing to simmer down and the Fed pausing its interest-rate hikes, the stock market is still facing many steep risks. America’s political situation hasn’t been this tense in decades. The EU is facing a host of challenges, and the Chinese-U.S. trade war could easily flare up again.
Add it all up, and things could easily get volatile quite soon. That leaves investors wondering where they can go for safety.
After years of tech outperforming everything, the problems facing Apple (NASDAQ: ), Facebook (NASDAQ:), and Amazon (NASDAQ:) have many people bailing on growth as well. That leaves safe-haven dividend stocks as a more favorable alternative. Here are six worth taking a look at.
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Diageo (DEO)
Dividend Yield: 2.08%
Rain or shine, good economy or bad, people like to drink alcohol. And for , that makes Diageo (NYSE:) an ideal play. While its name may not be familiar, its brands almost certainly are. Diageo owns and manufactures Guinness beer, Captain Morgan rum, Smirnoff vodka and Johnnie Walker whiskey, among many others.
DEO stock is a well-known safe haven for investors. The company is headquartered in the U.K., and was one of the very few stocks to go up the day after Brexit in that country as British investors sold risky stocks and moved to safety. Diageo will again serve as a safe haven whenever the next bear market/recession hits.
Diageo isn’t just a great business, it’s also a great dividend play. The company has continuously raised its dividend (as measured in its home currency of British Pounds) each of the past 20 years.
Source: Shutterstock
Campbell Soup (CPB)
Dividend Yield: 3.69%
Campbell Soup (NYSE:) is one of the unloved packaged-foods makers. It’s not hard to see why, if you only think about the company’s name. Canned soup certainly isn’t trendy with younger consumers at this point. And there’s a general nutritional wariness about heavily salted foods.
That said, there’s much more to Campbell Soup than just the iconic red cans. The company is more and more a snack food play. As we know, while Americans profess an interest in healthier eating, they still love their junk food from time to time. Campbell’s, owner of Hanover, Pop Secret, Goldfish and Pepperidge Farm, is in a great position to profit off of this.
Pepsico (NYSE:), the leader in snacks, consistently gets a high P/E ratio from the market, as investors acknowledge the stickiness of their brands with consumers. The market, however, is not appreciating Campbell Soup at all. Shares are down from $50 in 2017 to $38 now.
That has attracted activist investors, who got a new CEO hired and are demanding more change. If shares stay down here, expect that a suitor will buy out the company at a nice premium. If not, enjoy the dividend.
Source: Shutterstock
PacWest Bancorp (PACW)
Dividend Yield: 6%
After investors dumped bank stocks late last year, a lot of value has been created in this generally overlooked sector of the market, where solid dividends abound.
That brings us to PacWest Bancorp (NASDAQ:), which offers a 6% dividend yield at the moment. Headquartered in Los Angeles, PacWest is a major player throughout the California market and currently sports a $5.1 billion market cap. That puts it in a sweet spot, size-wise, where it may still be a buyout candidate, but it is large enough to manage the rising costs of regulation and banking technology costs.
Despite the horrid state of the California housing market in 2008, PacWest survived the crisis; in fact its shares never came close to zero during the panic. The bank has come out stronger, and is now generating record profits. Thanks to the corporate tax cuts in particular, PACW stock is now at a cheap P/E ratio of just 10.89 times its trailing earnings.
New York Community Bancorp (NYCB)
Dividend Yield: 5.92%
Despite its large yield, New York Community Bancorp (NASDAQ:) is an even safer bank stock. NYCB stock currently yields 5.92%, and they earn more than enough to cover the dividend, with earnings coming in at around 79 cents and dividends at 68 cents annually.
NYCB stock was down 12% last year because the sector was down, as discussed above. Over the last few months, though, it has fought its way back to the levels it traded at before the fall. That’s why the bank is one of the safest in the country. It lends primarily against multi-family homes in New York City, one of the lowest-risk lending markets out there.
The bank’s loans barely budged in performance even during 2008. With a strong dividend covered out of earnings and a safe loan book, investors can earn a large dividend income from a most conservative bank.
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Southern Co (SO)
Dividend Yield: 4.7%
In the worst of times, people tend to still want to use electricity. Even a severe economic downturn tends to not impact utility stocks too dramatically. As such, it’s a sound sector to buy when investors get panicky, such as what we’re seeing with the market now.
Southern Co (NYSE:), as one of the highest-yielding large power utilities, checks the boxes for safe dividend stocks here. SO stock is currently yielding 4.7%.
Its high yield is in large part, it seems, due to interest rates going up. Many investors treat utility stocks as substitutes for bonds. As such, when interest rates go up, investors demand a higher yield from their utility stock as well. If interest rates were to keep surging for years to come, SO stock would likely underperform. Right now, though, that clearly is not the case.
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Exxon Mobil (XOM)
Dividend Yield: 4.5%
Speaking of things people use in good times and bad, gasoline ranks pretty highly on the list. Sure there is a minor drop-off in consumption during recessions, as people take fewer road trips, for example, but in general, oil and gas is a safe haven business. And Exxon Mobil (NYSE:) as the largest U.S. player is a true sleep-well-at-night stock.
The combination of a fortress balance sheet, diversified operations and a storied dividend make XOM stock an excellent place to endure market storms. It may seem strange to call Exxon diversified. But what many investors don’t realize is that much of big oil has spun off the other segments of their businesses.
We saw a ton of refining and pipelines subsidiaries moved out of the parent companies into MLPs and other corporate entities. That is all well and good as far as shareholder value maximization goes. But Exxon’s more diversified approach ensures that it remains solidly profitable even when the price of oil plummets, as it did in recent years.
XOM stock is hardly the most exciting in a high growth market. But at 16 times earnings and paying a slightly greater than 4% dividend yield, it is a fine option for defensive investors. And buyers are still getting a fair value at this point.
At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock. You can reach him on Twitter at @irbezek.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Source: Diageo (DEO) Dividend Yield: 2.08% Rain or shine, good economy or bad, people like to drink alcohol. DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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Source: Diageo (DEO) Dividend Yield: 2.08% Rain or shine, good economy or bad, people like to drink alcohol. DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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Source: Diageo (DEO) Dividend Yield: 2.08% Rain or shine, good economy or bad, people like to drink alcohol. DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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Source: Diageo (DEO) Dividend Yield: 2.08% Rain or shine, good economy or bad, people like to drink alcohol. DEO stock is a well-known safe haven for investors. At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock.
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2019-04-17 00:00:00 UTC
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It's Official! This Major Pot Stock Wants a Partner
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DEO
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https://www.nasdaq.com/articles/its-official-major-pot-stock-wants-partner-2019-04-17
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nan
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The marijuana industry is evolving at a truly incredible pace. After languishing for decades as an underground market, cannabis is now thriving legally in Canada and in roughly two-thirds of all U.S. states where medical marijuana laws allow physicians to prescribe the drug. With its legality progressing globally, the sky is seemingly the limit for the pot industry and marijuana stocks.
We're also just beginning to see capacity expansion bearing fruit for marijuana stocks. Although it's still very early on in the expansion process, some of the largest pot stocks, such as Canopy Growth and Aurora Cannabis (NYSE: ACB), have managed impressive early sales figures, with 97.7 million Canadian dollars and CA$62 million in gross revenue in their most recent quarters, respectively.
But what's arguably the biggest sign of the maturation process in the marijuana industry is the number of brand-name partnerships that have been forged recently.
Image source: Getty Images.
Representing a sign of maturity, partnerships blossom in the marijuana space
Last August, Molson Coors Brewing (NYSE: TAP) kicked things off when it announced a somewhat surprising 57.5%-42.5% joint venture with HEXO to develop, manufacture, and distribute nonalcoholic cannabis-infused beverages. Mind you, alternative cannabis products are still illegal in Canada, though Health Canada is expected to give additional consumption options the green light by this coming fall. Considering that Molson Coors is contending with precipitously falling beer market share in Canada, and HEXO is angling to expand its production line beyond dried cannabis, a tie-up made perfect sense.
Just two weeks after this announcement, Canopy Growth and Constellation Brands (NYSE: STZ) became more intertwined than ever before. That's because Constellation made its third -- and largest -- equity investment in Canopy to date, totaling $4 billion. The maker of Corona and Modelo beer now has a 37% equity investment in Canopy, which is a lot more serious than the simple joint venture between Molson Coors and HEXO. Constellation is expected to work with Canopy on developing a line of cannabis-infused beverages.
Then, in December, we saw Tilray expand an existing partnership with Novartis' generic-drug subsidiary Sandoz to distribute nonsmokable pot products globally. Tilray also formed a $100 million joint venture with Anheuser-Busch InBev to develop infused beverages.
This combination of up-and-coming marijuana producers and deep-pocketed, marketing-expertise-rich beverage companies is flourishing, and now another major pot stock is ready to find itself a partner.
Image source: Getty Images.
This major cannabis grower is now actively seeking a partner
On Monday, April 15, Atlantic-based grower OrganiGram Holdings (NASDAQOTH: OGRMF) reported its fiscal second-quarter operating results. Aside from reversing from a small profit to a modest loss in the current quarter, mostly as a result of ongoing expansion at its Moncton campus, OrganiGram's sequential quarterly revenue more than doubled, and its adjusted gross margin, before fair-value adjustments of biological assets, came in near the top of the industry at 60%.
But it wasn't OrganiGram's financial data that did most of the talking following its operating results. Rather, it was the company's announcement that it had "developed a shelf stable, water-soluble and tasteless cannabinoid nano-emulsion formulation that provides an initial onset within 10 to 15 minutes if used in a beverage." OrganiGram believes it's generated a unique infused beverage, but also noted that it has no plans to launch its own cannabinoid-infused beverage line.
What's truly exciting is that OrganiGram admits in its quarterly operating press release that it's "actively seeking a strategic partner with proven experience in beverage product development." Landing a partner would help OrganiGram, a company capable of 113,000 kilos of peak annual production, add yet another high-margin alternative sales channel (in addition to vaporizable pen technologies and edibles) beyond dried cannabis.
Image source: Coca-Cola.
Two beverage partners that might make sense for OrganiGram
The big question is: What company should consider partnering with OrganiGram?
Although it's relatively small among the major growers, with only a single cultivation campus, OrganiGram provides superior yield, geographic competitive advantages, and supply deal partnerships in all of Canada's provinces, which is something only two other pot stocks can proclaim. In other words, it should be a hot commodity among brand-name beverage companies.
I'd suggest the first of two logical partnership opportunities is with Diageo (NYSE: DEO). The company behind Smirnoff, Johnnie Walker, and Guinness announced last year that it was interested in finding a partner to develop infused beverages. Unlike Molson Coors, which is seeking cannabis out of continued sales weakness in North America, Diageo's sales have been strong in North America. Instead, partnering with OrganiGram would give Diageo yet another line of high-margin, foot-traffic-generating products to penetrate the North American market.
The other potentially logical partnership would be with Coca-Cola (NYSE: KO), which had discussions with Aurora Cannabis last year that didn't end in a deal. Coca-Cola has said that it's monitoring the progress of the cannabis industry from the sidelines, but it may have been turned off by Aurora's aggressive expansion activity that would have diluted any equity investment into the company. OrganiGram, which sports a $1 billion market cap, is much smaller than Aurora and would likely be more willing than any of its larger peers to let Coca-Cola take the reins on any cannabinoid-based beverage development.
Regardless of the company that OrganiGram partners with, it's worth keeping a close eye on this pot stock moving forward.
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool owns shares of Molson Coors Brewing. The Motley Fool recommends BUD, Constellation Brands, Diageo, HEXO, and OrganiGram Holdings. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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I'd suggest the first of two logical partnership opportunities is with Diageo (NYSE: DEO). Representing a sign of maturity, partnerships blossom in the marijuana space Last August, Molson Coors Brewing (NYSE: TAP) kicked things off when it announced a somewhat surprising 57.5%-42.5% joint venture with HEXO to develop, manufacture, and distribute nonalcoholic cannabis-infused beverages. Landing a partner would help OrganiGram, a company capable of 113,000 kilos of peak annual production, add yet another high-margin alternative sales channel (in addition to vaporizable pen technologies and edibles) beyond dried cannabis.
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I'd suggest the first of two logical partnership opportunities is with Diageo (NYSE: DEO). Although it's still very early on in the expansion process, some of the largest pot stocks, such as Canopy Growth and Aurora Cannabis (NYSE: ACB), have managed impressive early sales figures, with 97.7 million Canadian dollars and CA$62 million in gross revenue in their most recent quarters, respectively. Considering that Molson Coors is contending with precipitously falling beer market share in Canada, and HEXO is angling to expand its production line beyond dried cannabis, a tie-up made perfect sense.
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I'd suggest the first of two logical partnership opportunities is with Diageo (NYSE: DEO). Although it's still very early on in the expansion process, some of the largest pot stocks, such as Canopy Growth and Aurora Cannabis (NYSE: ACB), have managed impressive early sales figures, with 97.7 million Canadian dollars and CA$62 million in gross revenue in their most recent quarters, respectively. Representing a sign of maturity, partnerships blossom in the marijuana space Last August, Molson Coors Brewing (NYSE: TAP) kicked things off when it announced a somewhat surprising 57.5%-42.5% joint venture with HEXO to develop, manufacture, and distribute nonalcoholic cannabis-infused beverages.
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I'd suggest the first of two logical partnership opportunities is with Diageo (NYSE: DEO). With its legality progressing globally, the sky is seemingly the limit for the pot industry and marijuana stocks. Two beverage partners that might make sense for OrganiGram The big question is: What company should consider partnering with OrganiGram?
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727784.0
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2019-03-29 00:00:00 UTC
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7 Stocks Still Worth Buying at 52-Week Highs
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DEO
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https://www.nasdaq.com/articles/7-stocks-still-worth-buying-at-52-week-highs-2019-03-29
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If you’re looking for stocks to buy, a recent stat from Investors Business Daily should provide you with plenty of ammunition.
According to IBD, there were and ETFs at 52-week highs as of March 21 compared to just 73 lows. As I write this, on March 26, there are 49 stocks at 52-week highs trading on the NASDAQ and 153 on the NYSE for a total of 202, down from a few days ago, but still well above the 56 new lows on the two exchanges.
So, while the ratio of stocks hitting 52-week highs to those hitting 52-week lows has fallen from 5.3 to 3.6, the reality is that 2019 is turning out to be much improved from the 2018 edition of the market.
To give you an idea of how improved, consider that not one of the sectors in the S&P 500 is down in 2019 through March 25. Seven of the 11 sectors are sporting double-digit returns with the best performance coming from Technology (up 17.8%) and the worst from Healthcare, which is down 4.7% YTD.
If you want to join the party, here are seven stocks to buy as they hit a 52-week high.
Procter & Gamble (PG)
Source: Mike Mozart via Flickr (Modified)
As I write this March 26, Procter & Gamble (NYSE:) has just hit a 52-week high of $103.48. Up 12% year to date and 38% over the past 52 weeks, PG has never traded this high before.
Talk about a comeback. It seems like only yesterday that the company was struggling under the weight of too many underperforming brands.
“Less will be much more,” former CEO Alan Lafley analysts in August 2014. “The objective is growth and much more reliable generation of cash and profit. We’re going to be much more agile and adaptable.”
Analysts applauded the move to shed more than half its brands, opting to go with those generating more than $1 billion in annual revenue. While it took some time to resonate with investors, the company’s move led to a increase in free cash flow since 2014. Just as important, it’s converting all of its net profits and then some to free cash flow, well above its seven-year average.
Investors who bought this time last year are sitting on a handsome profit.
Diageo (DEO)
Source: Mustafa Khayat Via Flickr
As I write this, Diageo (NYSE:) has hit a 52-week high of $165.53. Up 16% year to date and 26% over the past 52 weeks, DEO is sitting at an all-time high.
So, what’s happening to move DEO higher?
Well, it seems that consumers are moving from beer to premium spirits, the company’s biggest strength, and that’s delivering revenue and earnings growth.
“We are benefiting from consumer trends where people are drinking better and want better brands and experiences,” CEO Ivan Menezes CNBC in January. “People are moving to spirits and cocktails in a bigger way from wine and beer, and people are trading up for more premium brands.”
Case in point: Diageo’s sales in China grew by in the second half of 2018 with particular strength in its scotch and baijiu brands. The economy might be slowing in China, but consumers there are still shelling out for quality spirits.
In the first half of 2019, Diageo’s sales increased by , its operating margin rose by 170 basis points to 35.2%, and free cash flow jumped by 30.8%.
Business is strong and likely to stay that way for the remainder of 2019 and into 2020.
Starbucks (SBUX)
Source:
Starbucks (NASDAQ:) hit a 52-week high of $73.19 on March 26. It’s up 13% year to date and 31% over the past 52 weeks, SBUX is sitting at an all-time high.
I can’t remember the first time I recommended Starbucks stock for InvestorPlace readers, but I do know that I gave Howard Schultz and SBUX stock the big thumbs up in July 2013.
“It’s coming up with new product ideas like its Refreshers line of cold beverages that use coffee innovation to drive revenues and its food business is still in the early stages of development,” I at the time. “Yet investors have barely noticed. Despite generating some of the best results in the company’s history, its stock has gained just 27% over the past 52 weeks. To me, that spells value.”
SBUX stock is up 98% since July 2013, an excellent return considering it hit the skids last summer, but has recovered nicely.
Last April, I that Starbucks would be fine without Howard Schultz holding down an executive position at the company. With China keeping CEO Kevin Johnson very busy — it’s opening a new store there at a blistering pace of one every 15 hours.
Whatever the latest issue is that gets investors in a twist, Starbucks always figures out how to cope. That’s a trait you want in all your investments.
General Mills (GIS)
Source: Shutterstock
General Mills (NYSE:) hit a 52-week high of $51.93 on March 26. It’s up 32% year to date and 20% over the past 52 weeks. GIS is sitting well off its all-time high of $72.77, hit in July 2016.
What’s worked at General Mills to get its stock on the move? It’s a combination of things.
First, it helps to hire a CEO who’s not afraid to implement change. Jeff Harmening did just that when he was promoted in from COO to chief executive, replacing his boss, Ken Powell, who retired after a decade in the top job
Secondly, it doesn’t hurt to prices to offset higher costs, which keeps earnings moving higher until organic sales reignite.
Lastly, and probably most importantly, General Mills’ acquisition of Blue Buffalo in 2018 for $8 billion, sent the company on a completely different trajectory, one that investors have bought hook, line, and sinker.
Many thought General Mills overpaid. I don’t see it that way. Here’s what I said about Blue Buffalo recently.
“I’m generally not a fan of big acquisitions because they typically don’t generate the synergies and savings projected nor do they provide the expected growth, either,” I March 19. “However, in the case of General Mills, it had to do something because its cereal business was imploding, losing almost 3% growth in revenue over five years. Investors were avoiding GIS stock as a result.”
General Mills strong Q3 2019 results March 20 beating the consensus estimate on both the top and bottom line. I believe this is only the tip of the iceberg.
Hershey (HSY)
Source: mhiguera via Flickr
Sounding like a bit of broken record, Hershey (NYSE:) hit a 52-week high of $113.40 on March 26. It’s up 6% year to date and 20% over the past 52 weeks. HSY is sitting just three dollars shy of its all-time high of $116.49, hit in May 2016.
Although the stock market is going like gangbusters at the moment, there have been some rumblings recently about a recession taking hold in late 2019. If that were to happen, Hershey’s ideally positioned to ride out the storm.
In January, Citigroup (NYSE:) equity strategy analyst Tobias Levkovich published a list of 50 companies whose pricing power he felt would allow them to outperform in a slowing economy. Hershey made the cut.
Levkovich didn’t indicate how much investors would be willing to pay for Hershey’s ability to raise prices in good times and bad, but it certainly can’t hurt as a foundation for considering an investment in the Pennsylvania maker of chocolate bars and candy.
Two things I like about Hershey.
One is CEO Michelle Buck.
In 2018, I Buck along with six other female CEOs, whose stocks investors should buy. I continue to recommend Hershey stock because of her leadership. Also, Hershey’s board is 45% women, a very high representation compared to other members of the S&P 500.
The second reason I like Hershey is it’s controlled by the Hershey Trust, ensuring that short-term moves to boost profits at the expense of the Hershey legacy aren’t possible.
You might not like dual-class share structures, but in instances like this, they’re an absolute must.
Church & Dwight (CHD)
Source:
Church & Dwight (NYSE:) hit a 52-week high of $69.54 on March 26. It’s up 4% year to date and 46% over the past 52 weeks. CHD is sitting at its all-time high, hit on March 26.
I consider Church & Dwight to be the poor cousin of Procter & Gamble. Its brands aren’t nearly as flashy as P&G’s, most people wouldn’t know who either Church or Dwight was and it’s a much smaller company making it far less attractive to blue-chip investors.
That said, it’s one of my favorite stocks of all time.
“It buys brands with high margins and market shares, doesn’t overpay for them, and then grows them organically through the process mentioned previously, all the while converting free cash flow at a better rate than anyone in the industry,” I in April 2016
The process I speak of is Church & Dwight’s three-point plan: It creates innovative new products and brand extensions, it spends considerable amounts advertising its handful of power brands, and then increases a product’s distribution as extensive geographically and by type of market as it possibly can.
It’s hard work. Very few can do what it does.
That’s why it hasn’t had a down year in over a decade.
Ulta Beauty (ULTA)
Source:
Ulta Beauty (NASDAQ:) hit a 52-week high of $345.63 on March 26. It’s up 40% year to date and 65% over the past 52 weeks. ULTA is sitting at its all-time high, hit on March 26.
If you’re like me and have followed the company’s stock for some years, you’ll remember the specialty retailer’s June 2017 swoon that saw it lose more than a quarter of its value in two months.
In August 2017, I investors buy its shares before and after announcing Q2 2017 results, regardless of the direction of its share price. I made that call because of my confidence in the company’s growth strategy.
Here’s how it played out.
Ulta shares closed trading August 24, 2017, at $233.71 a share.
It Q2 2017 revenues and earnings that beat analyst expectations. However, investors didn’t like the slowdown in same-store-sales growth, so its shares dropped by 9.1% on the next day’s trading. It then spent the next 15 months in a trading range between $200-$300.
So, if you bought 100 shares of ULTA stock on August 24, 2017, at the high of $247.30 and 100 shares on August 25, 2017, at the high of $217.80, you’d be up 47% in the 20 months since.
I’m not saying this to toot my own horn. Instead, I’m saying it because I believe that the earnings momentum it continues to enjoy is going to carry on into fiscal 2019 and beyond.
I live in Canada. There isn’t a single Ulta store open here. The last time I looked, Canadians didn’t have a problem shopping at Sephora. I doubt they’d have a problem buying at Ulta.
Between Canada and e-commerce, the pathway to growth is alive and well.
At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.
The post appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (DEO) Source: Mustafa Khayat Via Flickr As I write this, Diageo (NYSE:) has hit a 52-week high of $165.53. Up 16% year to date and 26% over the past 52 weeks, DEO is sitting at an all-time high. So, what’s happening to move DEO higher?
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Diageo (DEO) Source: Mustafa Khayat Via Flickr As I write this, Diageo (NYSE:) has hit a 52-week high of $165.53. Up 16% year to date and 26% over the past 52 weeks, DEO is sitting at an all-time high. So, what’s happening to move DEO higher?
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Diageo (DEO) Source: Mustafa Khayat Via Flickr As I write this, Diageo (NYSE:) has hit a 52-week high of $165.53. Up 16% year to date and 26% over the past 52 weeks, DEO is sitting at an all-time high. So, what’s happening to move DEO higher?
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Diageo (DEO) Source: Mustafa Khayat Via Flickr As I write this, Diageo (NYSE:) has hit a 52-week high of $165.53. Up 16% year to date and 26% over the past 52 weeks, DEO is sitting at an all-time high. So, what’s happening to move DEO higher?
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4d106f3f-bff0-4f91-8242-0d378665f140
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727785.0
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2019-03-19 00:00:00 UTC
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Kraft Heinz Needs to Do These 3 Things Right Now
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DEO
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https://www.nasdaq.com/articles/kraft-heinz-needs-do-these-3-things-right-now-2019-03-19
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
I didn't think it could get much worse for Kraft Heinz (NASDAQ: KHC ), but it did. Standard and Poor's put the company on CreditWatch negative for failing to file its annual report with the SEC. Down went Kraft Heinz stock hitting a 52-week and all-time low.
Source: Mike Mozart via Flickr
If there was any doubt tha
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Standard and Poor's put the company on CreditWatch negative for failing to file its annual report with the SEC. Down went Kraft Heinz stock hitting a 52-week and all-time low. Source: Mike Mozart via Flickr If there was any doubt tha
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips I didn't think it could get much worse for Kraft Heinz (NASDAQ: KHC ), but it did. Standard and Poor's put the company on CreditWatch negative for failing to file its annual report with the SEC. Down went Kraft Heinz stock hitting a 52-week and all-time low.
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips I didn't think it could get much worse for Kraft Heinz (NASDAQ: KHC ), but it did. Standard and Poor's put the company on CreditWatch negative for failing to file its annual report with the SEC. Source: Mike Mozart via Flickr If there was any doubt tha
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips I didn't think it could get much worse for Kraft Heinz (NASDAQ: KHC ), but it did. Standard and Poor's put the company on CreditWatch negative for failing to file its annual report with the SEC. Down went Kraft Heinz stock hitting a 52-week and all-time low.
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dfb68739-f463-48da-a27c-a7c450972e4b
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727786.0
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2019-03-18 00:00:00 UTC
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Tilray Stock Mania Holds Its Breath as Earnings Approach
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DEO
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https://www.nasdaq.com/articles/tilray-stock-mania-holds-its-breath-earnings-approach-2019-03-18
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The social stigma against marijuana continues to slowly dissipate.
Source: Shutterstock
A construction worker's pick-up truck passed me twice during a recent walk, apparently looking for a job site, the smell of marijuana smoke redolent in the air. It's still illegal to smoke in Georgia, but that doesn't mean the illegal market isn't operating …
But what about the legal market?
Stock in Tilray (NASDAQ: TLRY ), the Canadian pot company, now sits finely poised between earnings due on today after the bell and a shortage of stock to short.
Tilray stock is expected to lose 12 cents per share on revenue of $14.15 million. ( Earnings Whispers puts the numbers for earnings and revenue at -15 cents and $17.69mm, respectively.) But that may be less important to speculators than Tilray's efforts to create credibility with the marijuana and general investor communities.
7 Small-Cap Stocks That Make the Grade
Consider the following: Tilray has appointed Andrew Pucher, a former managing director at Goldman Sachs (NYSE: GS ), as chief corporate development officer.
Pucher joins a team that now includes former executives from Nestle (OTCMKTS: NSRGY ), Diageo (NYSE: DEO ), Coca-Cola (NYSE: KO ) and Starbucks (NASDAQ: SBUX ). Further, Tilray has a partnership with Novartis (NYSE: NVS ), a joint venture with Anheuser-Busch InBev (NYSE: BUD ) and a production agreement with the privately-held Authentic Brands Group .
Finally, Tilray last week announced a deal to buy Manitoba Harvest from Compass Group (NYSE: CODI ) for about $315 million.
With all this corporate star power and deal-making, you would think Tilray would be a major pot producer.
What About the Product?
What product?
Tilray sold no marijuana during the first two weeks after Canada legalized it in October. CEO Brendan Kennedy insisted that this will have changed by this quarter, while simultaneously announcing he bought producer Natura Naturalsfor $26.3 million. If all this is leaving you skeptical about the company, you're not alone …
Tilray short interest recently stood at 4 million shares, 24.62% of the company's float, and there's no more available to borrow. That's why shares of a company that may report revenue of $17 million trade at a market capitalization of almost $7 billion.
The other is that most of the shares don't trade, with over 78% held by "individual stakeholders." There are 79 million shares outstanding.
The Marijuana Market
Speculators are betting that over the next few years, many more U.S. states will legalize marijuana sales and are looking to legislators for guidance.
New Jersey is the latest with a bill to allow recreational sales. Meanwhile, Massachusetts is getting a network of pot shops , debate has begun in Connecticut and New York Governor Andrew Cuomo is pushing the issue.
But despite the examples of Colorado and Washington, the path to legal pot is still not a straight line.
Minnesota Republicans recently rejected a legalization effort, prospects are dimming in New Mexico and New York's move is being held up by black legislators who want specific provisions for their communities to benefit.
As a result, most moves lately have been toward legalizing medical marijuana, with doctors' prescriptions and extensive regulation. Florida is moving in that direction. So is Oklahoma.
All that said, marijuana remains an illegal drug under U.S. law.
People are still being put in jail for marijuana offenses and Tesla (NASDAQ: TSLA ) CEO Elon Musk may lose his SpaceX security clearance after being shown on video smoking pot on a podcast.
Bottom Line on Tilray Stock
Despite the success of Colorado, where marijuana sales are now growing at only single-digit rates in the fifth year of legalization , the product remains controversial.
Tilray and its competitors are preparing for an opportunity that may not come to them for years. Meanwhile, marijuana stocks have been bid well beyond fundamentals. A lot of people are cashing big paychecks, and the dream of a well-regulated American pot market remains hazy.
Dana Blankenhorn is a financial and technology journalist. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.comor follow him on Twitter at @danablankenhorn . As of this writing, he owned no shares in companies mentioned in this article.
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The post Tilray Stock Mania Holds Its Breath as Earnings Approach appeared first on InvestorPlace .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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People are still being put in jail for marijuana offenses and Tesla (NASDAQ: TSLA ) CEO Elon Musk may lose his SpaceX security clearance after being shown on video smoking pot on a podcast. Pucher joins a team that now includes former executives from Nestle (OTCMKTS: NSRGY ), Diageo (NYSE: DEO ), Coca-Cola (NYSE: KO ) and Starbucks (NASDAQ: SBUX ). 7 Small-Cap Stocks That Make the Grade Consider the following: Tilray has appointed Andrew Pucher, a former managing director at Goldman Sachs (NYSE: GS ), as chief corporate development officer.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Pucher joins a team that now includes former executives from Nestle (OTCMKTS: NSRGY ), Diageo (NYSE: DEO ), Coca-Cola (NYSE: KO ) and Starbucks (NASDAQ: SBUX ). People are still being put in jail for marijuana offenses and Tesla (NASDAQ: TSLA ) CEO Elon Musk may lose his SpaceX security clearance after being shown on video smoking pot on a podcast.
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Pucher joins a team that now includes former executives from Nestle (OTCMKTS: NSRGY ), Diageo (NYSE: DEO ), Coca-Cola (NYSE: KO ) and Starbucks (NASDAQ: SBUX ). People are still being put in jail for marijuana offenses and Tesla (NASDAQ: TSLA ) CEO Elon Musk may lose his SpaceX security clearance after being shown on video smoking pot on a podcast. Stock in Tilray (NASDAQ: TLRY ), the Canadian pot company, now sits finely poised between earnings due on today after the bell and a shortage of stock to short.
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Pucher joins a team that now includes former executives from Nestle (OTCMKTS: NSRGY ), Diageo (NYSE: DEO ), Coca-Cola (NYSE: KO ) and Starbucks (NASDAQ: SBUX ). People are still being put in jail for marijuana offenses and Tesla (NASDAQ: TSLA ) CEO Elon Musk may lose his SpaceX security clearance after being shown on video smoking pot on a podcast. That's why shares of a company that may report revenue of $17 million trade at a market capitalization of almost $7 billion.
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2019-03-15 00:00:00 UTC
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Diageo (DEO) is a Great Momentum Stock: Should You Buy?
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DEO
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https://www.nasdaq.com/articles/diageo-deo-is-a-great-momentum-stock%3A-should-you-buy-2019-03-15
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nan
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nan
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Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores , helps address this issue for us.
Below, we take a look at Diageo (DEO) , which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Diageo currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?
In order to see if DEO is a promising momentum pick, let's examine some Momentum Style elements to see if this spirits and beer company holds up.
Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
For DEO, shares are up 1.98% over the past week while the Zacks Beverages - Alcohol industry is down 0.33% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 4.17% compares favorably with the industry's 0.54% performance as well.
Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Over the past quarter, shares of Diageo have risen 14.42%, and are up 18.99% in the last year. In comparison, the S&P 500 has only moved 8.65% and 4.16%, respectively.
Investors should also pay attention to DEO's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. DEO is currently averaging 512,440 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with DEO.
Over the past two months, 2 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost DEO's consensus estimate, increasing from $6.69 to $6.87 in the past 60 days. Looking at the next fiscal year, 2 estimates have moved upwards while there have been no downward revisions in the same time period.
Bottom Line
Taking into account all of these elements, it should come as no surprise that DEO is a #2 (Buy) stock with a Momentum Score of B. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep Diageo on your short list.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Diageo plc (DEO): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Below, we take a look at Diageo (DEO) , which currently has a Momentum Style Score of B. In order to see if DEO is a promising momentum pick, let's examine some Momentum Style elements to see if this spirits and beer company holds up. For DEO, shares are up 1.98% over the past week while the Zacks Beverages - Alcohol industry is down 0.33% over the same time period.
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Below, we take a look at Diageo (DEO) , which currently has a Momentum Style Score of B. In order to see if DEO is a promising momentum pick, let's examine some Momentum Style elements to see if this spirits and beer company holds up. For DEO, shares are up 1.98% over the past week while the Zacks Beverages - Alcohol industry is down 0.33% over the same time period.
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Below, we take a look at Diageo (DEO) , which currently has a Momentum Style Score of B. In order to see if DEO is a promising momentum pick, let's examine some Momentum Style elements to see if this spirits and beer company holds up. For DEO, shares are up 1.98% over the past week while the Zacks Beverages - Alcohol industry is down 0.33% over the same time period.
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Below, we take a look at Diageo (DEO) , which currently has a Momentum Style Score of B. DEO is currently averaging 512,440 shares for the last 20 days. In order to see if DEO is a promising momentum pick, let's examine some Momentum Style elements to see if this spirits and beer company holds up.
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727788.0
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2019-03-15 00:00:00 UTC
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ETFs & Stocks for a Green Portfolio on St. Patrick's Day
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DEO
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https://www.nasdaq.com/articles/etfs-stocks-green-portfolio-st-patricks-day-2019-03-15
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nan
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nan
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St. Patrick's Day is around the corner and investors across the world are keen on trying their Irish luck for green returns in their stock portfolio. This will lead to an upsurge in investments, which acts as catalysts for the stocks.
Per the National Retail Federation, about 55% of Americans are expected to celebrate St. Patrick's Day this year with average spending of $40.18, up from $39.65 in 2018 and $37.92 in 2017. However, total spending is estimated to decline to $5.61 billion this year from a record $5.92 billion seen last year (read: Consumer ETFs: Bull Market Winners With Room to Run in 2019 ).
The day, associated with wearing green, food, drinking and home decoration with shamrocks, leprechauns and pots of gold, has become popular among the young people in recent years. About 72% of the spenders aged under 35 years plan to celebrate the Irish festival compared with 50% in 2009.
About 49% of the Americans will be spending on holiday-themed food, 40% on beverages, 29% on apparels, 23% on decoration, 16% on candy, 9% on greeting cards and 6% on gifts. Further, Americans plan to celebrate the holiday in a number of ways with 81% wearing green, 30% planning a special dinner, 27% throwing a party at a bar or a restaurant, 24% decorating their homes or offices in an Irish theme and 16% attending private parties. Additionally, 15% plans to attend a St. Patrick's Day parade and 10% will host a party.
Given the splurge, it will not come as a surprise if the stock market could Wearin' o' the Green in honor of St. Patrick's Day. In particular, retailers, food and beverage companies and restaurants could see a huge jump in respective stock prices as higher consumer purchase will likely boost revenues. So, raise a toast to the ETFs & stocks in these sectors and try to find some hidden luck this Irish festival.
Invesco Dynamic Food & Beverage ETF PBJ
This product offers exposure to 30 companies engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies by tracking the Dynamic Food & Beverage Intellidex Index. The fund has amassed $69 million in its asset base while trading in average daily volume of 9,000 shares. It charges 63 bps in annual fees from investors and has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook (read: January Retail Sales Strong Despite Shutdown: ETF & Stock Bets ).
SPDR S&P Retail ETF XRT
This product targets the retail segment of the broad U.S. market. It tracks the S&P Retail Select Industry Index, holding 94 securities in its basket. The fund has amassed $327.9 million in its asset base and charges 35 bps in annual fees. Volume is extremely solid, exchanging nearly 6.8 million shares in hand a day on average. The fund has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Amplify Online Retail ETF IBUY
This ETF offers global exposure to companies that derive 70% or more revenues from online and virtual retail by tracking the EQM Online Retail Index. It is a home to 40 stocks and has accumulated $282.6 million in its asset base. The product charges 65 bps in fees per year and trades in a moderate volume of 127,000 shares a day on average (read: Internet ETFs & Stocks Top Bull Market: Will the Rally Continue? ).
Diageo Plc DEO
St. Patrick's Day is the fourth largest drinking day in the United States after New Year's Eve, Christmas and Fourth of July with Guinness being the most popular brand. Some of the other popular drinks include Irish stout and Irish ale. Guinness is one of the Diageo's brands and it will find its pot of gold as about 13 million pints are likely to be consumed on St. Patrick's Day. This is nearly four times the consumption on a normal day. Diageo has a Zacks Rank #2 (Buy) and a VGM Score of C. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
McDonald's Corporation MCD
St. Patrick's Day leads to pots of gold for bars and restaurants. While most restaurant stocks will get a boost on the day, McDonald's could be an excellent pick. It is the world's leading global food service retailer and will offer Shamrock Shake until Mar 24 on the occasion of Irish festival. It has a Zacks Rank of 3.
Hormel Foods Corporation HRL
In the United States, St. Patrick's Day is associated with the consumption of corned beef though it is not an Irish national dish. Corned beef is used as a substitute for bacon by Irish-American immigrants and many companies produce this product in various forms. One such entity is Hormel Foods, which markets corned beef through the brand name, Hormel Mary Kitchen hash. It also offers several recipes to prepare a wide range of corned beef at home. The stock is a Zacks #3 Ranked player.
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Diageo plc (DEO): Free Stock Analysis Report
SPDR S&P Retail ETF (XRT): ETF Research Reports
Amplify Online Retail ETF (IBUY): ETF Research Reports
Invesco Dynamic Food & Beverage ETF (PBJ): ETF Research Reports
Hormel Foods Corporation (HRL): Free Stock Analysis Report
McDonald's Corporation (MCD): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo Plc DEO St. Patrick's Day is the fourth largest drinking day in the United States after New Year's Eve, Christmas and Fourth of July with Guinness being the most popular brand. Click to get this free report Diageo plc (DEO): Free Stock Analysis Report SPDR S&P Retail ETF (XRT): ETF Research Reports Amplify Online Retail ETF (IBUY): ETF Research Reports Invesco Dynamic Food & Beverage ETF (PBJ): ETF Research Reports Hormel Foods Corporation (HRL): Free Stock Analysis Report McDonald's Corporation (MCD): Free Stock Analysis Report To read this article on Zacks.com click here. The day, associated with wearing green, food, drinking and home decoration with shamrocks, leprechauns and pots of gold, has become popular among the young people in recent years.
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Click to get this free report Diageo plc (DEO): Free Stock Analysis Report SPDR S&P Retail ETF (XRT): ETF Research Reports Amplify Online Retail ETF (IBUY): ETF Research Reports Invesco Dynamic Food & Beverage ETF (PBJ): ETF Research Reports Hormel Foods Corporation (HRL): Free Stock Analysis Report McDonald's Corporation (MCD): Free Stock Analysis Report To read this article on Zacks.com click here. Diageo Plc DEO St. Patrick's Day is the fourth largest drinking day in the United States after New Year's Eve, Christmas and Fourth of July with Guinness being the most popular brand. It charges 63 bps in annual fees from investors and has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook (read: January Retail Sales Strong Despite Shutdown: ETF & Stock Bets ).
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Click to get this free report Diageo plc (DEO): Free Stock Analysis Report SPDR S&P Retail ETF (XRT): ETF Research Reports Amplify Online Retail ETF (IBUY): ETF Research Reports Invesco Dynamic Food & Beverage ETF (PBJ): ETF Research Reports Hormel Foods Corporation (HRL): Free Stock Analysis Report McDonald's Corporation (MCD): Free Stock Analysis Report To read this article on Zacks.com click here. Diageo Plc DEO St. Patrick's Day is the fourth largest drinking day in the United States after New Year's Eve, Christmas and Fourth of July with Guinness being the most popular brand. Invesco Dynamic Food & Beverage ETF PBJ This product offers exposure to 30 companies engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies by tracking the Dynamic Food & Beverage Intellidex Index.
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Click to get this free report Diageo plc (DEO): Free Stock Analysis Report SPDR S&P Retail ETF (XRT): ETF Research Reports Amplify Online Retail ETF (IBUY): ETF Research Reports Invesco Dynamic Food & Beverage ETF (PBJ): ETF Research Reports Hormel Foods Corporation (HRL): Free Stock Analysis Report McDonald's Corporation (MCD): Free Stock Analysis Report To read this article on Zacks.com click here. Diageo Plc DEO St. Patrick's Day is the fourth largest drinking day in the United States after New Year's Eve, Christmas and Fourth of July with Guinness being the most popular brand. The product charges 65 bps in fees per year and trades in a moderate volume of 127,000 shares a day on average (read: Internet ETFs & Stocks Top Bull Market: Will the Rally Continue?
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727789.0
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2019-03-15 00:00:00 UTC
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Try Your Luck Out With These Stocks on St. Patrick's Day
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DEO
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https://www.nasdaq.com/articles/try-your-luck-out-these-stocks-st-patricks-day-2019-03-15
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nan
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nan
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Saint Patrick's Day is a cultural festival held on Mar 17, the death date of Ireland's Saint Patrick. Today the event is not bound to Ireland itself, with its reach spreading to different parts of world.
More than half of American adults will take part in the celebration, with 72% of those aged under 35, 57% of those under 55 years of age and 41% belonging to the 55-and-older population, per National Retail Federation . Consumers plan to spend an average of $40 for the day. However, investors should note that the participation rate has declined for three age groups this year.
However, investors can get into the party mood through this event. Different corners of economy should earn solid bucks from it and make a meaningful impact on the stock market. Let's tell you how.
Go Green
When it comes to celebration, 82% men and 86% women prefer to wear green. So, investors can surely bet on the companies that sell such outfits or costumes. Also, 30% women and 23% men are willing to go for home or office decoration. There are several who seek to host/attend a party. So, what could be better than to invest in some stores that sells decorative stuffs and green costumes?
eBay Inc. EBAY - Zacks Rank #3 (Hold)
It is a global commerce leader, which includes our Marketplace, StubHub and Classifieds platforms. Along with green costumes, the online store sells St. Patrick's Day decorations like lighted Shamrocks, glitter Shamrock or wooden Shamrock.
Walmart Inc. (WMT) - Zacks Rank #2 (Buy)
This multinational retail corporation operates a chain of hypermarkets, discount department stores and grocery stores, It sells green Irish T-Shirts, Hat, Shamrock-shaped sunglasses, St. Patrick's Day Leprechaun Adult Shirt and many more.
Stock Up on Alcohol Stocks
As many as 35% of women and 32% of men will hit bars or restaurants to celebrate the event.
Compania Cervecerias Unidas, S.A. (CCU) - Zacks Rank #1
The company has successfully positioned itself as a Chilean multinational beverage company, with diversified businesses and operations focused on the Southern Cone of South America.
Diageo plc (DEO) - Zacks Rank #2
This is a multinational branded food and drinks company. Diageo has an outstanding portfolio of world-famous food and drink brands including Smirnoff, Johnnie Walker, J&B, Gordon's, Malibu, Baileys, Guinness and Tanqueray.
Party at Bars & Restaurants
The day normally see massive footfall in pubs and restaurants. Some eateries even offer deals. So, one may keep a tab on these restaurant stocks.
Brinker International Inc. (EAT) - Zacks Rank #2
The company owns, operates, franchises or is involved in the ownership of restaurants under the names Chili's Grill & Bar and Maggiano's Little Italy. Chili's is celebrating St. Patrick's Day with its $5 Lucky Jameson Margarita special through Mar 31, 2019.
Cracker Barrel Old Country Store Inc. (CBRL) - Zacks Rank #3
It is principally engaged in the operation and development of the Cracker Barrel Old Country Store restaurant and retail concept. It is serving Corned Beef and Cabbage from Mar 11-17, 2019, per the source .
Pot of Gold for Discount Retailers
Many people prefer to hit discount stores to purchase some of their St. Patrick's Day stuff. NRF's Fall 2018 Consumer View report revealed that more than 90% of millennials and adult Gen Zers normally shop at bargain retailers. This makes sense to have a look at discount retailers for green returns.
Target Corporation (TGT) - Zacks Rank #2
Target Corporation operates large-format general merchandise and food discount stores in the United States, which include Target and SuperTarget stores.
Costco Wholesale Corporation COST - Zacks Rank #2
The company operates an international chain of membership warehouses that carry quality, brand name merchandise at substantially lower prices than what is typically found at conventional wholesale or retail sources.
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eBay Inc. (EBAY): Free Stock Analysis Report
Compania Cervecerias Unidas, S.A. (CCU): Free Stock Analysis Report
Diageo plc (DEO): Free Stock Analysis Report
Costco Wholesale Corporation (COST): Free Stock Analysis Report
Walmart Inc. (WMT): Free Stock Analysis Report
Target Corporation (TGT): Free Stock Analysis Report
Brinker International, Inc. (EAT): Free Stock Analysis Report
Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo plc (DEO) - Zacks Rank #2 This is a multinational branded food and drinks company. Click to get this free report eBay Inc. (EBAY): Free Stock Analysis Report Compania Cervecerias Unidas, S.A. (CCU): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Costco Wholesale Corporation (COST): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis Report Target Corporation (TGT): Free Stock Analysis Report Brinker International, Inc. (EAT): Free Stock Analysis Report Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report To read this article on Zacks.com click here. Diageo has an outstanding portfolio of world-famous food and drink brands including Smirnoff, Johnnie Walker, J&B, Gordon's, Malibu, Baileys, Guinness and Tanqueray.
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Click to get this free report eBay Inc. (EBAY): Free Stock Analysis Report Compania Cervecerias Unidas, S.A. (CCU): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Costco Wholesale Corporation (COST): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis Report Target Corporation (TGT): Free Stock Analysis Report Brinker International, Inc. (EAT): Free Stock Analysis Report Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report To read this article on Zacks.com click here. Diageo plc (DEO) - Zacks Rank #2 This is a multinational branded food and drinks company. Walmart Inc. (WMT) - Zacks Rank #2 (Buy) This multinational retail corporation operates a chain of hypermarkets, discount department stores and grocery stores, It sells green Irish T-Shirts, Hat, Shamrock-shaped sunglasses, St. Patrick's Day Leprechaun Adult Shirt and many more.
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Click to get this free report eBay Inc. (EBAY): Free Stock Analysis Report Compania Cervecerias Unidas, S.A. (CCU): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Costco Wholesale Corporation (COST): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis Report Target Corporation (TGT): Free Stock Analysis Report Brinker International, Inc. (EAT): Free Stock Analysis Report Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report To read this article on Zacks.com click here. Diageo plc (DEO) - Zacks Rank #2 This is a multinational branded food and drinks company. Walmart Inc. (WMT) - Zacks Rank #2 (Buy) This multinational retail corporation operates a chain of hypermarkets, discount department stores and grocery stores, It sells green Irish T-Shirts, Hat, Shamrock-shaped sunglasses, St. Patrick's Day Leprechaun Adult Shirt and many more.
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Diageo plc (DEO) - Zacks Rank #2 This is a multinational branded food and drinks company. Click to get this free report eBay Inc. (EBAY): Free Stock Analysis Report Compania Cervecerias Unidas, S.A. (CCU): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Costco Wholesale Corporation (COST): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis Report Target Corporation (TGT): Free Stock Analysis Report Brinker International, Inc. (EAT): Free Stock Analysis Report Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report To read this article on Zacks.com click here. However, investors can get into the party mood through this event.
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f77c97b1-4756-46f6-afcc-acba9436d9b5
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727790.0
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2019-03-15 00:00:00 UTC
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Bear of the Day: Anheuser-Busch InBev (BUD)
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DEO
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https://www.nasdaq.com/articles/bear-day-anheuser-busch-inbev-bud-2019-03-15
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nan
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nan
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Earnings estimate revisions are a fickle beast. Stocks which were flying high last month could be down in the dumps after a bearish downside revision. But paying attention to these revisions before they show up in the price could help investors avoid potential downfalls. Today's Bear of the Day is a stock that has been flying high but has seen estimates come down. I'm talking about Zacks Rank #5 (Strong Sell) Anheuser-Busch InBev (BUD).
Anheuser-Busch InBev SA/NV, a brewing company, engages in the production, distribution, and sale of beer, alcoholic beverages, and soft drinks worldwide. It offers a portfolio of approximately 500 beer brands, including Budweiser, Corona, and Stella Artois; Beck's, Castle, Castle Lite, Hoegaarden, and Leffe; and Aguila, Antarctica, Bud Light, Brahma, Cass, Chernigivske, Cristal, Harbin, Jupiler, Klinskoye, Michelob Ultra, Modelo Especial, Quilmes, Victoria, Sedrin, Sibirskaya Korona, and Skol.
The reason for the unfavorable Zacks Rank is the series of negative earnings estimate revisions coming from analysts. Over the last thirty days, two analysts have cut their estimates for the current year while one analyst has cut its estimates for next year. The bearish sentiment has dropped our current year Zacks Consensus Estimate from $4.88 to $4.80 while next year's number has come down from $5.48 to $5.36. Next year's number still represents earnings growth of 11.56% year-over-year.
Anheuser-Busch InBev SA/NV Price and Consensus
Anheuser-Busch InBev SA/NV Price and Consensus | Anheuser-Busch InBev SA/NV Quote
Investors looking for other stocks within the Beverages - Alcohol industry should check out Zacks Rank #1 (Strong Buy) Compania Cervecerias Unidas (CCU) and several Zacks Rank #2 (Buy) stocks including Diageo (DEO).
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 - 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
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Diageo plc (DEO): Free Stock Analysis Report
Compania Cervecerias Unidas, S.A. (CCU): Free Stock Analysis Report
Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Anheuser-Busch InBev SA/NV Price and Consensus Anheuser-Busch InBev SA/NV Price and Consensus | Anheuser-Busch InBev SA/NV Quote Investors looking for other stocks within the Beverages - Alcohol industry should check out Zacks Rank #1 (Strong Buy) Compania Cervecerias Unidas (CCU) and several Zacks Rank #2 (Buy) stocks including Diageo (DEO). Click to get this free report Diageo plc (DEO): Free Stock Analysis Report Compania Cervecerias Unidas, S.A. (CCU): Free Stock Analysis Report Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report To read this article on Zacks.com click here. Anheuser-Busch InBev SA/NV, a brewing company, engages in the production, distribution, and sale of beer, alcoholic beverages, and soft drinks worldwide.
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Anheuser-Busch InBev SA/NV Price and Consensus Anheuser-Busch InBev SA/NV Price and Consensus | Anheuser-Busch InBev SA/NV Quote Investors looking for other stocks within the Beverages - Alcohol industry should check out Zacks Rank #1 (Strong Buy) Compania Cervecerias Unidas (CCU) and several Zacks Rank #2 (Buy) stocks including Diageo (DEO). Click to get this free report Diageo plc (DEO): Free Stock Analysis Report Compania Cervecerias Unidas, S.A. (CCU): Free Stock Analysis Report Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report To read this article on Zacks.com click here. I'm talking about Zacks Rank #5 (Strong Sell) Anheuser-Busch InBev (BUD).
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Anheuser-Busch InBev SA/NV Price and Consensus Anheuser-Busch InBev SA/NV Price and Consensus | Anheuser-Busch InBev SA/NV Quote Investors looking for other stocks within the Beverages - Alcohol industry should check out Zacks Rank #1 (Strong Buy) Compania Cervecerias Unidas (CCU) and several Zacks Rank #2 (Buy) stocks including Diageo (DEO). Click to get this free report Diageo plc (DEO): Free Stock Analysis Report Compania Cervecerias Unidas, S.A. (CCU): Free Stock Analysis Report Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report To read this article on Zacks.com click here. Over the last thirty days, two analysts have cut their estimates for the current year while one analyst has cut its estimates for next year.
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Anheuser-Busch InBev SA/NV Price and Consensus Anheuser-Busch InBev SA/NV Price and Consensus | Anheuser-Busch InBev SA/NV Quote Investors looking for other stocks within the Beverages - Alcohol industry should check out Zacks Rank #1 (Strong Buy) Compania Cervecerias Unidas (CCU) and several Zacks Rank #2 (Buy) stocks including Diageo (DEO). Click to get this free report Diageo plc (DEO): Free Stock Analysis Report Compania Cervecerias Unidas, S.A. (CCU): Free Stock Analysis Report Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report To read this article on Zacks.com click here. Today's Bear of the Day is a stock that has been flying high but has seen estimates come down.
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f81173ed-075e-4566-b091-8e6adbe4471f
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727791.0
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2019-03-06 00:00:00 UTC
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Brown-Forman (BF.B) Q3 Earnings Beat, High Tariffs Hurt Sales
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DEO
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https://www.nasdaq.com/articles/brown-forman-bf.b-q3-earnings-beat-high-tariffs-hurt-sales-2019-03-06
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nan
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Brown-Forman CorporationBF.B has reported third-quarter fiscal 2019 results, wherein earnings topped estimates while sales lagged. This marked the company's seventh straight quarter o f earnings beat. However, sales missed estimates for the second consecutive quarter.
Earnings per share of 47 cents increased 20% year over year and surpassed the Zacks Consensus Estimate of 44 cents.
Brown-Forman Corporation Price, Consensus and EPS Surprise
Brown-Forman Corporation Price, Consensus and EPS Surprise | Brown-Forman Corporation Quote
Net sales improved 3% year over year to $904 million, missing the Zacks Consensus Estimate of $907.4 million. This year-over-year increase was driven by sustained sales growth for the company's portfolio of premium spirits brands, particularly bourbon and tequila brands. Additionally, international expansion for the Jack Daniel's trademark aided sales.
Sales increased 4% on an underlying basis (excluding negative currency impact and other adjustments), marking tenth straight quarterly growth. Underlying net sales for the fiscal third quarter included negative impact of nearly one percentage point from lower net prices to distributors in certain markets to offset additional tariff-related costs.
Year to date, underlying sales have improved 5%, including about one percentage point impact of tariff-related lower net prices. The increase can be attributed to broad-based growth across geographies and balanced contribution from its portfolio of brands.
On a geographic basis, year-to-date underlying sales growth has been the strongest in emerging markets. Underlying sales grew 4% in developed international markets, 10% in emerging markets and 4% in the United States. Growth across the company's portfolio was led by Jack Daniel's family of brands, which reported 4% underlying sales growth year to date. Underlying sales for the company's super-premium American whiskey brands grew 24% while Herradura and el Jimador grew 14% and 15%, respectively.
In the fiscal third quarter, Brown-Forman's gross profit declined nearly 3% to $571 million while gross margin contracted 370 basis points (bps) to 63.1%. On an underlying basis, gross profit increased 1%.
Selling, general and administrative (SG&A) expenses dropped 13% year over year to $149 million while it declined 11% on an underlying basis. The decrease in SG&A expenses can be attributed to continued focus on cost management and efficiency gains as well as fall in compensation-related costs. Additionally, advertising expenses declined 8% year over year to $103 million and were down 4% on an underlying basis.
Notably, the company's operating performance benefited from its cost discipline, which helped negate some of the large burdens of retaliatory tariffs on American whiskey. Consequently, operating income improved 4%, on both reported and underlying basis, to $320 million. Meanwhile, operating margin expanded 40 bps to 35.3%.
Overall, this Zacks Rank #3 (Hold) company's shares have surged 12.1% in the past three months, outperforming the industry 's growth of 7.3%.
Balance Sheet & Cash Flow
Brown-Forman ended third-quarter fiscal 2019 with cash and cash equivalents of $260 million, and long-term debt of $2,301 million. Its total shareholders' equity was $1,493 million as of Jan 31, 2019.
In the first nine months of fiscal 2019, the company generated $577 million in cash from operating activities.
During the fiscal third quarter, the company bought back about 1.6 million of class A and class B shares for $78 million. With this, it completed its current share repurchase authorization of $200 million.
On Jan 29, the company declared a quarterly cash dividend of 16.6 cents per share on Class A and Class B shares, reflecting an annualized dividend rate of 66.4 cents. The dividend is payable on Apr 1, 2019, to shareholders of record as of March 4.
Fiscal 2019 Outlook
The company believes that fierce competition in developed economies as well as concerns related to the recently enacted retaliatory tariffs on American whiskey made the prediction of its near-term results difficult.
For fiscal 2019, the company continues to expec t earnings per share of $1.65-$1.75, assuming tariffs to remain in place for the fiscal year.
Moreover, the company projects underlying sales growth of 6-7%. For fiscal 2019, it expects modest decline in underlying SG&A expenses while underlying A&P is expected to be in line with net sales growth. Additionally, underlying operating income is anticipated to increase 4-6%.
Looking for Better-Ranked Alcohol Stocks? Check These
The Boston Beer Company Inc. SAM has a long-term earnings growth rate of 10% and a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Diageo plc DEO has a long-term earnings growth rate of 8.4% and a Zacks Rank #2.
Carlsberg AS CABGY , also a Zacks Rank #2 stock, has a long-term earnings growth rate of 5%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 - 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report
Diageo plc (DEO): Free Stock Analysis Report
Carlsberg AS (CABGY): Free Stock Analysis Report
Brown-Forman Corporation (BF.B): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo plc DEO has a long-term earnings growth rate of 8.4% and a Zacks Rank #2. Click to get this free report The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Carlsberg AS (CABGY): Free Stock Analysis Report Brown-Forman Corporation (BF.B): Free Stock Analysis Report To read this article on Zacks.com click here. Sales increased 4% on an underlying basis (excluding negative currency impact and other adjustments), marking tenth straight quarterly growth.
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Click to get this free report The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Carlsberg AS (CABGY): Free Stock Analysis Report Brown-Forman Corporation (BF.B): Free Stock Analysis Report To read this article on Zacks.com click here. Diageo plc DEO has a long-term earnings growth rate of 8.4% and a Zacks Rank #2. Brown-Forman Corporation Price, Consensus and EPS Surprise Brown-Forman Corporation Price, Consensus and EPS Surprise | Brown-Forman Corporation Quote Net sales improved 3% year over year to $904 million, missing the Zacks Consensus Estimate of $907.4 million.
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Click to get this free report The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Carlsberg AS (CABGY): Free Stock Analysis Report Brown-Forman Corporation (BF.B): Free Stock Analysis Report To read this article on Zacks.com click here. Diageo plc DEO has a long-term earnings growth rate of 8.4% and a Zacks Rank #2. Brown-Forman Corporation Price, Consensus and EPS Surprise Brown-Forman Corporation Price, Consensus and EPS Surprise | Brown-Forman Corporation Quote Net sales improved 3% year over year to $904 million, missing the Zacks Consensus Estimate of $907.4 million.
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Diageo plc DEO has a long-term earnings growth rate of 8.4% and a Zacks Rank #2. Click to get this free report The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Carlsberg AS (CABGY): Free Stock Analysis Report Brown-Forman Corporation (BF.B): Free Stock Analysis Report To read this article on Zacks.com click here. Growth across the company's portfolio was led by Jack Daniel's family of brands, which reported 4% underlying sales growth year to date.
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673e873d-ce1c-452a-ae10-52e8ace015a1
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727792.0
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2019-03-01 00:00:00 UTC
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Keurig (KDP) Q4 Earnings In Line, Stock Slips on Soft View
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DEO
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https://www.nasdaq.com/articles/keurig-kdp-q4-earnings-in-line-stock-slips-on-soft-view-2019-03-01
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nan
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Keurig Dr Pepper Inc.KDP reported fourth-quarter 2018 results, wherein earnings matched estimates while sales missed. However, the company's top and bottom lines improved year over year due to gains from the merger between Keurig and Dr Pepper in July. Additionally, the company witnessed strong in-market gains as well as market share growth for carbonated soft drinks (CSD), single-serve coffee and other categories, which helped it reach target for 2018.
Despite this, the Keurig Dr Pepper stock lost investors' confidence due to the short fall in sales and a lower-than-expected earnings view for 2019. Shares of this Zacks Rank #3 (Hold) company has declined nearly 6.6% on Feb 28.
Investors seemed to be unhappy with the sales lag caused by decline in sales for the coffee systems business mainly due to lower volume for coffee brewers. Further, the company's guidance for adjusted earnings per share was $1.20-$1.22 for 2019, which was short of the Zacks Consensus Estimate of $1.24.
Nonetheless, management pointed out that the earnings growth forecast of 15-17% was in line with the long-term target for the 2018-2021 period, which was set out at the time of the merger.
Overall, shares of Keurig Dr Pepper belonging to the Zacks Beverages - Soft Drinks industry have declined 4.6% in the past three months as compared with the S&P 500 that increased 0.7%.
Quarterly Highlights
Adjusted earnings per share of 30 cents improved 25% year over year and were in line with the Zacks Consensus Estimate. The improvement was aided by an increase in adjusted pro forma operating income and considerable decline in interest expenses due to reduced indebtedness and unwinding of several interest rate swap contracts.
Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise
Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise | Keurig Dr Pepper, Inc Quote
Notably, the company repaid about $940 million of bank debt after the closing of the merger, driven by strong operating performance as well as effective working capital management.
Net sales of $2,813 million missed the Zacks Consensus Estimate of $2,852 million but more than doubled (up 140.4%) from the year-ago quarter figure of $1,170 million. The solid year-over-year improvement was attributed to benefits of the merger. Pro forma net sales improved 0.5% on the back of 2.7% growth in volume/mix, offset by 1.8% adverse effects from changes in Allied Brands portfolio in the Packaged Beverages segment and 0.4% impacts from currency headwinds.
During the fourth quarter, the company also benefited from strong retail market performance measured by IRI. I t report ed market share gains in both units and dollars for its CSD portfolio, backed by strength in Dr Pepper and Canada Dry brands. Further, its coffee portfolio gathered market share in units and dollars, driven by share gains for pods produced by Keurig Dr Pepper.
Adjusted pro forma operating income grew 12.9% year over year to $720 million, driven by solid sales growth, strong productivity, reduced SG&A expenses and lower marketing costs, offset by higher input and logistics costs. Additionally, negative comparison from $21-million gain on Bai recorded in the year-ago quarter impacted operating income. Moreover, adjusted operating margin expanded 280 basis points (bps) to 25.6%.
Segmental Details
Revenues for the Beverage Concentrates segment rose 4.8% year over year to $352 million, backed by higher realized prices and favorable volume/mix, offset by unfavorable currency rates.
Sales for the Packaged Beverage segment were $1.18 billion, up 0.1% from the year-ago quarter. The increase reflected from volume/mix gains and increased price realization, partly offset by negative effects of the changes in Allied Brands portfolio and currency translations.
Revenues from the Latin America Beverage segment improved 1.7% to $120 million, driven by higher price realization and volume/mix growth, offset by unfavorable currency.
The Coffee Systems segment's sales dipped 0.5% to $1.16 billion from $1.17 billion in the year-ago quarter. The decline stemmed from lower pricing as well as adverse currency effects, partly compensated by volume/mix growth. Volume/mix grew 2.9%, benefiting from increase in K-Cup pod volume, offset by lower volume for brewers due to shipment timing between the third and fourth quarters of 2018, and the discontinuation of certain legacy Keurig brewer models. However, recently launched innovation products are witnessing favorable trends in the market.
Financials
Keurig Dr Pepper ended 2018 with cash and cash equivalents of $83 million as of Dec 31, 2018, compared with $90 million as of Dec 31, 2017. Long-term obligations totaled $14,201 million and stockholders equity was $22,533 million. Net cash provided by operating activities totaled nearly $1,613 million as of Dec 31, 2018.
Outlook
Despite a strong end to 2018, Keurig Dr Pepper expects the operating environment to be more challenging in 2019.
The aforementioned earnings view for 2019 is supported by net sales growth of about 2%, which is also in line with the company's long-term sales growth target of 2-3%.Further, it anticipates capturing merger synergies of nearly $200 million in 2019, consistent with the long-term target of capturing $200-million synergies every year between 2019 and 2021.
Other non-operating income/expense is projected to be $30 million in 2019. Adjusted net interest expense is likely to be $570-$590 million, driven by ongoing efforts to lower debt and benefits from the unwinding of interest swap contracts. Adjusted effective tax is expected to be 25-25.5%, with outstanding shares estimated at 1,420 million.
Additionally, the company expects significant cash flow generation and rapid deleveraging, targeting a leverage ratio of less than 3.0 in two to three years from the closing of the merger in July 2018.
Don't Miss These Better-Ranked Stocks in the Beverage Industry
Monster Beverage Corporation MNST has a long-term earnings growth rate of 16% and a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Coca-Cola European Partners PLC CCEP has a long-term earnings growth rate of 8.7% and a Zacks Rank #2.
Diageo plc DEO , also a Zacks Rank #2 stock, has a long-term earnings growth rate of 8.4%.
This Could Be the Fastest Way to Grow Wealth in 2019
Research indicates one sector is poised to deliver a crop of the best-performing stocks you'll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.
These companies are changing the world - and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98%, +119% and +164% gains in as little as 1 month.
Click here to see these breakthrough stocks now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Diageo plc (DEO): Free Stock Analysis Report
Monster Beverage Corporation (MNST): Free Stock Analysis Report
Coca-Cola European Partners PLC (CCEP): Free Stock Analysis Report
Keurig Dr Pepper, Inc (KDP): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo plc DEO , also a Zacks Rank #2 stock, has a long-term earnings growth rate of 8.4%. Click to get this free report Diageo plc (DEO): Free Stock Analysis Report Monster Beverage Corporation (MNST): Free Stock Analysis Report Coca-Cola European Partners PLC (CCEP): Free Stock Analysis Report Keurig Dr Pepper, Inc (KDP): Free Stock Analysis Report To read this article on Zacks.com click here. Additionally, the company witnessed strong in-market gains as well as market share growth for carbonated soft drinks (CSD), single-serve coffee and other categories, which helped it reach target for 2018.
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Click to get this free report Diageo plc (DEO): Free Stock Analysis Report Monster Beverage Corporation (MNST): Free Stock Analysis Report Coca-Cola European Partners PLC (CCEP): Free Stock Analysis Report Keurig Dr Pepper, Inc (KDP): Free Stock Analysis Report To read this article on Zacks.com click here. Diageo plc DEO , also a Zacks Rank #2 stock, has a long-term earnings growth rate of 8.4%. Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise | Keurig Dr Pepper, Inc Quote Notably, the company repaid about $940 million of bank debt after the closing of the merger, driven by strong operating performance as well as effective working capital management.
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Click to get this free report Diageo plc (DEO): Free Stock Analysis Report Monster Beverage Corporation (MNST): Free Stock Analysis Report Coca-Cola European Partners PLC (CCEP): Free Stock Analysis Report Keurig Dr Pepper, Inc (KDP): Free Stock Analysis Report To read this article on Zacks.com click here. Diageo plc DEO , also a Zacks Rank #2 stock, has a long-term earnings growth rate of 8.4%. Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise Keurig Dr Pepper, Inc Price, Consensus and EPS Surprise | Keurig Dr Pepper, Inc Quote Notably, the company repaid about $940 million of bank debt after the closing of the merger, driven by strong operating performance as well as effective working capital management.
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Diageo plc DEO , also a Zacks Rank #2 stock, has a long-term earnings growth rate of 8.4%. Click to get this free report Diageo plc (DEO): Free Stock Analysis Report Monster Beverage Corporation (MNST): Free Stock Analysis Report Coca-Cola European Partners PLC (CCEP): Free Stock Analysis Report Keurig Dr Pepper, Inc (KDP): Free Stock Analysis Report To read this article on Zacks.com click here. However, the company's top and bottom lines improved year over year due to gains from the merger between Keurig and Dr Pepper in July.
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2019-02-28 00:00:00 UTC
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AB InBev (BUD) Q4 Earnings & Revenues Surpass Estimates
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DEO
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https://www.nasdaq.com/articles/ab-inbev-bud-q4-earnings-revenues-surpass-estimates-2019-02-28
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nan
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Anheuser-Busch InBev SA/NVBUD , also known as AB InBev, reported better-than-expected earnings and revenues for fourth-quarter 2018. Notably, the company reported earnings beat in three of the five preceding quarters. Further, revenues surpassed estimates in four of the last five quarters.
Overall, shares of AB InBev have declined 3% in the past three months against the S&P 500's growth of 1.8%.
Q4 Highlights
Underlying earnings per share of $1.26 rose 1.6% year over year from $1.24 in the year-ago quarter. The bottom line also beat the Zacks Consensus Estimate of $1.15. The company gained from improving trends in key markets and continued premiumization in the majority of its markets.
Revenues declined 2.4% to $14,250 million but beat the Zacks Consensus Estimate of $13,870 million. However, the company registered organic revenue growth of 5.3%, courtesy of 4.6% rise in revenues per hectoliter (hl) on a constant-geographic basis. The increase stemmed from ongoing revenue management initiatives along with strong performance of premium brands. Further, revenue per hl advanced 4.9% on a reported basis.
Consolidated revenues at the company's three global brands - Budweiser, Corona and Stella Artois - improved 9.8% globally and 12.6% outside their respective home markets.
Total organic volume advanced 0.3%, with own-beer volume rising 1.2% while non-beer volume declined 4.9%.
The cost of sales inched up 0.5% year over year to $5,193 million while grew 6.5% organically. Further, cost of sales per hl grew 6%, both organically and on a constant-geographic basis.
The company's normalized earnings before interest, taxes, depreciation and amortization (EBITDA) were $6,166 million, which dipped 0.4% year over year but improved 10% on an organic basis. The increase in organic EBITDA was driven by premiumization, cost discipline and continued synergy capture. EBITDA margin expanded 90 basis points (bps) to 43.3% while it increased 190 bps organically.
Outlook
Following strong close to 2018, AB InBev issued encouraging guidance for 2019. The company anticipates delivering strong top-line and EBITDA growth for the year, backed by solid brand performance and robust commercial plans. Driven by increased focus on category development, it expects to deliver balanced top-line growth between volume and revenue per hl. Net revenue per hl growth is likely to exceed inflation while costs (sum of cost of sales and SG&A) are expected to come below inflation. Premiumization and revenue management initiatives are likely to aid revenue per hl growth.
The company projects cost of sales per hl to increase in a mid-single digit, with currency and commodity headwinds to be offset by cost management initiatives.
Further, this Zacks Rank #4 (Sell) company reiterated synergy and cost-saving guidance at $3.2 billion that was announced in August 2016. Of this, nearly $547 million was reported by SABMiller as of Mar 31, 2016, and about $2,391 million captured between Apr 1, 2016, and Dec 31, 2018. The company expects to achieve remaining synergies of nearly $250 million by the end of 2019.
For 2019, management anticipates normalized effective tax rate of 25-27%. Net capital expenditure is projected between $4 billion and $4.5 billion. AB InBev envisions dividend growth to be modest in the near term due to increased importance of deleveraging. However, dividends are likely to grow gradually in the long term.
Three Better-Ranked Stocks in the Alcohol Industry
The Boston Beer Company Inc. SAM has a long-term earnings growth rate of 10% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Diageo plc DEO has a long-term earnings growth rate of 8.4% and a Zacks Rank #2 (Buy).
Carlsberg AS CABGY , also a Zacks Rank #2 stock, has a long-term earnings growth rate of 5%.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
See Latest Stocks Today >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report
Diageo plc (DEO): Free Stock Analysis Report
Carlsberg AS (CABGY): Free Stock Analysis Report
The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo plc DEO has a long-term earnings growth rate of 8.4% and a Zacks Rank #2 (Buy). Click to get this free report Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Carlsberg AS (CABGY): Free Stock Analysis Report The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report To read this article on Zacks.com click here. The company anticipates delivering strong top-line and EBITDA growth for the year, backed by solid brand performance and robust commercial plans.
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Diageo plc DEO has a long-term earnings growth rate of 8.4% and a Zacks Rank #2 (Buy). Click to get this free report Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Carlsberg AS (CABGY): Free Stock Analysis Report The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report To read this article on Zacks.com click here. Three Better-Ranked Stocks in the Alcohol Industry The Boston Beer Company Inc. SAM has a long-term earnings growth rate of 10% and a Zacks Rank #1 (Strong Buy).
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Click to get this free report Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Carlsberg AS (CABGY): Free Stock Analysis Report The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report To read this article on Zacks.com click here. Diageo plc DEO has a long-term earnings growth rate of 8.4% and a Zacks Rank #2 (Buy). However, the company registered organic revenue growth of 5.3%, courtesy of 4.6% rise in revenues per hectoliter (hl) on a constant-geographic basis.
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Diageo plc DEO has a long-term earnings growth rate of 8.4% and a Zacks Rank #2 (Buy). Click to get this free report Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Carlsberg AS (CABGY): Free Stock Analysis Report The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report To read this article on Zacks.com click here. The company gained from improving trends in key markets and continued premiumization in the majority of its markets.
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2019-02-25 00:00:00 UTC
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6 Safe Dividend Stocks to Buy Now
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DEO
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https://www.nasdaq.com/articles/6-safe-dividend-stocks-to-buy-now-2019-02-25
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
[Editor's note: This story was previously published in December 2018. It has since been updated and republished.]
Even with the China-U.S. trade war appearing to simmer down and the Fed looking set to pause its interest-rate hikes, the stock market is still facing many steep risks. America's political situation hasn't been this tense in decades. The EU is facing a host of challenges, and the Chinese-U.S. trade war could easily flare up again. Similarly, the Fed could soon become hawkish again.
Add it all up, and things could easily get volatile quite soon. That leaves investors wondering where they can go for safety.
7 Cheap Stocks That Make the Grade
After years of tech outperforming everything, the problems facing Apple (NASDAQ: AAPL ), Facebook (NASDAQ: FB ), and Amazon (NASDAQ: AMZN ) have many people bailing on growth as well. That leaves safe-haven dividend stocks as a more favorable alternative. Here are six worth taking a look at.
Diageo (DEO)
Dividend Yield: 1.75%
Rain or shine, good economy or bad, people like to drink alcohol. And for safe dividend seekers, that makes Diageo (NYSE: DEO ) an ideal play. While its name may not be familiar, its brands almost certainly are. Diageo owns and manufactures Guinness beer, Captain Morgan rum, Smirnoff vodka and Johnnie Walker whiskey, among many others.
DEO stock is a well-known safe haven for investors. The company is headquartered in the U.K., and was one of the very few stocks to go up the day after Brexit in that country as British investors sold risky stocks and moved to safety. Diageo will again serve as a safe haven whenever the next bear market/recession hits.
Diageo isn't just a great business, it's also a great dividend play. The company has continuously raised its dividend (as measured in its home currency of British Pounds) each of the past 20 years.
Campbell Soup (CPB)
Dividend Yield: 4.33%
Campbell Soup (NYSE: CPB ) is one of the unloved packaged-foods makers. It's not hard to see why, if you only think about the company's name. Canned soup certainly isn't trendy with younger consumers at this point. And there's a general nutritional wariness about heavily salted foods.
That said, there's much more to Campbell Soup than just the iconic red cans. The company is more and more a snack food play. As we know, while Americans profess an interest in healthier eating, they still love their junk food from time to time. Campbell's - owner of Hanover, Pop Secret, Goldfish and Pepperidge Farm - is in a great position to profit off of this.
Pepsico (NYSE: PEP ), the leader in snacks, consistently gets a high P/E ratio from the market, as investors acknowledge the stickiness of their brands with consumers. The market, however, is not appreciating Campbell Soup at all. Shares are down from $50 in 2017 to $32 now. That has attracted activist investors, who got a new CEO hired and are demanding more change. If shares stay down here, expect that a suitor will buy out the company at a nice premium. If not, enjoy the 4.3% dividend - the highest CPB stock has offered in at least 30 years.
PacWest Bancorp (PACW)
Dividend Yield: 5.86%
After investors dumped bank stocks late last year, a lot of value has been created in this generally overlooked sector of the market, where solid dividends abound.
That brings us to PacWest Bancorp (NASDAQ: PACW ), which offers a 5.86% dividend yield at the moment. Headquartered in Los Angeles, PacWest is a major player throughout the California market and currently sports a $5.1 billion market cap. That puts it in a sweet spot, size-wise, where it may still be a buyout candidate, but it is large enough to manage the rising costs of regulation and banking technology costs.
7 Cheap Stocks That Make the Grade
Despite the horrid state of the California housing market in 2008, PacWest survived the crisis; in fact its shares never came close to zero during the panic. The bank has come out stronger, and is now generating record profits. Thanks to the corporate tax cuts in particular, PACW stock is now at a cheap P/E ratio of just 11 times its trailing earnings.
New York Community Bancorp (NYCB)
Dividend Yield: 5.52%
Despite its large yield, New York Community Bancorp (NASDAQ: NYCB ) is an even safer bank stock. NYCB stock currently yields 5.5%, and they earn more than enough to cover the dividend, with earnings coming in at 79 cents and dividends at 68 cents annually.
Why is NYCB stock down 12% over the past year? Of course, the sector is down, as discussed above. On top of that, some investors hold a resentful view toward New York Community Bancorp due to a failed merger with Astoria Financial in late 2016. Due to Trump's unexpected win, bank stocks spiked, and the deal failed to close. Investors have had it out for NYCB's management ever since.
Regardless, the bank is one of the safest in the country. It lends primarily against multi-family homes in New York City - one of the lowest-risk lending markets out there. The bank's loans barely budged in performance even during 2008. With a strong dividend covered out of earnings and a safe loan book, investors can earn a large dividend income from a most conservative bank.
Southern Co (SO)
Dividend Yield: 4.9%
In the worst of times, people tend to still want to use electricity. Even a severe economic downturn tends to not impact utility stocks too dramatically. As such, it's a sound sector to buy when investors get panicky, such as what we're seeing with the market now.
Southern Co (NYSE: SO ), as one of the highest-yielding large power utilities, checks the boxes for safe dividend stocks here. SO stock is currently yielding 4.9%.
Its high yield is in large part, it seems, due to interest rates going up. Many investors treat utility stocks as substitutes for bonds. As such, when interest rates go up, investors demand a higher yield from their utility stock as well. If interest rates were to keep surging for years to come, SO stock would likely underperform.
7 Cheap Stocks That Make the Grade
But since the Fed looks set to pause its rate hikes,, a stock like Southern Co should shine.
Exxon Mobil (XOM)
Dividend Yield: 4.17%
Speaking of things people use in good times and bad, gasoline ranks pretty highly on the list. Sure there is a minor dropoff in consumption during recessions, as people take fewer road trips, for example, but in general, oil and gas is a safe haven business. And Exxon Mobil (NYSE: XOM ) as the largest U.S. player is a true sleep-well-at-night stock.
The combination of a fortress balance sheet, diversified operations and a storied dividend make XOM stock an excellent place to endure market storms. It may seem strange to call Exxon diversified. But what many investors don't realize is that much of big oil has spun off the other segments of their businesses. We saw a ton of refining and pipelines subsidiaries moved out of the parent companies into MLPs and other corporate entities. That is all well and good as far as shareholder value maximization goes. But Exxon's more diversified approach ensures that it remains solidly profitable even when the price of oil plummets, as it did in recent years.
XOM stock is hardly the most exciting in a high growth market. But at 16 times earnings and paying a slightly greater than 4% dividend yield, it is a fine option for defensive investors. And buyers are still getting a fair value at this point.
At the time of this writing, Ian Bezek owned DEO, CPB, PACW, NYCB and XOM stock. You can reach him on Twitter at @irbezek.
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The post 6 Safe Dividend Stocks to Buy Now appeared first on InvestorPlace .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diageo (DEO) Dividend Yield: 1.75% Rain or shine, good economy or bad, people like to drink alcohol. And for safe dividend seekers, that makes Diageo (NYSE: DEO ) an ideal play. DEO stock is a well-known safe haven for investors.
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Diageo (DEO) Dividend Yield: 1.75% Rain or shine, good economy or bad, people like to drink alcohol. And for safe dividend seekers, that makes Diageo (NYSE: DEO ) an ideal play. DEO stock is a well-known safe haven for investors.
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Diageo (DEO) Dividend Yield: 1.75% Rain or shine, good economy or bad, people like to drink alcohol. And for safe dividend seekers, that makes Diageo (NYSE: DEO ) an ideal play. DEO stock is a well-known safe haven for investors.
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Diageo (DEO) Dividend Yield: 1.75% Rain or shine, good economy or bad, people like to drink alcohol. And for safe dividend seekers, that makes Diageo (NYSE: DEO ) an ideal play. DEO stock is a well-known safe haven for investors.
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2019-02-21 00:00:00 UTC
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Boston Beer's (SAM) Earnings & Revenues Top Estimates in Q4
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DEO
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https://www.nasdaq.com/articles/boston-beers-sam-earnings-revenues-top-estimates-in-q4-2019-02-21
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nan
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nan
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The Boston Beer Company, Inc.SAM reported impressive fourth-quarter 2018 results, wherein earnings and revenues outpaced the Zacks Consensus Estimate. This marked the company's second straigh t earnings and sales beat. Further, management updated its guidance for 2019.
Following the quarterly results, shares of Boston Beer have increased 3.2% in after-hours trading yesterday. Also, this Zacks Rank #3 (Hold) stock has rallied 38.9% against the industry 's 17.5% decline in a year's time.
Q4 Highlights
Boston Beer's fourth-quarter adjusted earnings of $1.84 per share surpassed the Zacks Consensus Estimate of $1.77. Including tax benefits, earnings per share came in at $1.86, down from $2.57 mainly due to tax benefits in the year-ago period.
Net revenues advanced 9.2% year over year to $225.2 million and edge past the Zacks Consensus Estimate of $223 million. This outperformance can be primarily attributed to a 6.3% improvement in shipment volume to nearly 958 thousand barrels. Excluding excise taxes, the top line rose 8.5% year over year to $239.2 million.
Additionally, depletions grew 11% in the quarter mainly backed by major innovations, quality and strong brands alongside solid sales execution and support from distributors. Moreover, increases in Twisted Tea, Truly Hard Seltzer and Angry Orchard brands aided depletion growth, which was partly offset by fall in the Samuel Adams brand.
Depletions for the year-to-date period through the six weeks (ended Feb 9, 2019) are anticipated to have grown nearly 12% from the comparable year-ago period.
The Boston Beer Company, Inc. Price, Consensus and EPS Surprise
The Boston Beer Company, Inc. Price, Consensus and EPS Surprise | The Boston Beer Company, Inc. Quote
Costs & Margins
Gross profit improved 8.2% year over year to $116.9 million, while gross margin contracted 50 basis points to 51.9%. Elevated processing costs due to increased production at third-party breweries and higher temporary labor at company-owned breweries as well as escalated packaging costs resulted in gross margin decline. These factors were partly negated by price increases, cost-savings at company-owned breweries and lower excise taxes.
Furthermore, advertising, promotional and selling expenses decreased nearly 14% to $63.1 million, mainly on fall in spending on media advertising and point of sale marketing, somewhat compensated with improved local marketing, higher salaries and benefits expenses along with increased freight to distributors on escalated rates and volumes.
However, general and administrative expenses grew 32.4% to $24.9 million driven by higher salaries and benefits costs as well as stock compensation expenses.
Financials
As of Dec 29, 2018, Boston Beer had cash and cash equivalents of $108.4 million and total stockholders' equity of $460.3 million.
During 52 weeks (ended Dec 29) and the period between Dec 30, 2018, and Feb 15, 2019, Boston Beer bought back about 350,000 shares worth roughly $88.3 million. With this, it had nearly $90.3 million remaining under its $931-million share buyback authorization as of Feb 15, 2019.
Outlook
Boston Beer remains impressed with robust depletions and shipment growth. Further, the company is confident about its investment plans for the Angry Orchard brand this year. Also, it remains focused on innovations including Angry Orchard Rose, Truly Berry Variety Pack, Truly Wild Berry, Sam'76 and Samuel Adams New England IPA.
These apart, the company is on track to launch three more brands namely, 26.2 Brew, Wild Leaf Hard Tea and Tura Alcoholic Kombucha to address health and wellness prospects. Also, it remains committed toward cost savings and efficiency initiatives.
Further, management updated guidance for 2019. It estimates depletions and shipments percentage growth of 8-13% along with national price increases between 1% and 3%. The company expects double-digit growth in revenues and a robust increase in operating income as well.
Gross margin is still anticipated to be 51-53%. Investment in advertising, promotional and selling expenses is envisioned to increase $20-$30 million, down from $25-$35 million projected earlier. Notably, this guidance excludes any changes in freight costs for the shipment of products to the company's distributors.
Moreover, the adjusted effective tax rate is estimated to be roughly 27% for the year. Also, adjusted earnings per share are envisioned between $8.00 and $9.00. The Zacks Consensus Estimate for 2019 earnings stands at $8.22. Furthermore, the company continues to expect capital spending of $100-$120 million.
For the first quarter of 2019, the company expects shipments growth to be considerably higher than depletions.
Want Better-Ranked Consumer Staples Stocks? Check These
Diageo plc DEO has an expected long-term earnings growth rate of 8.4% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
The Simply Good Foods Company SMPL delivered average positive earnings surprise of 13.3% in the trailing four quarters. It currently carries a Zacks Rank #2 (Buy).
Nomad Foods Limited NOMD has an impressive long-term earnings growth rate of 11% and a Zacks Rank #2.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 - 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Diageo plc (DEO): Free Stock Analysis Report
The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report
Nomad Foods Limited (NOMD): Free Stock Analysis Report
The Simply Good Foods Company (SMPL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Check These Diageo plc DEO has an expected long-term earnings growth rate of 8.4% and a Zacks Rank #1 (Strong Buy). Click to get this free report Diageo plc (DEO): Free Stock Analysis Report The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report Nomad Foods Limited (NOMD): Free Stock Analysis Report The Simply Good Foods Company (SMPL): Free Stock Analysis Report To read this article on Zacks.com click here. The Boston Beer Company, Inc.SAM reported impressive fourth-quarter 2018 results, wherein earnings and revenues outpaced the Zacks Consensus Estimate.
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Click to get this free report Diageo plc (DEO): Free Stock Analysis Report The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report Nomad Foods Limited (NOMD): Free Stock Analysis Report The Simply Good Foods Company (SMPL): Free Stock Analysis Report To read this article on Zacks.com click here. Check These Diageo plc DEO has an expected long-term earnings growth rate of 8.4% and a Zacks Rank #1 (Strong Buy). The Boston Beer Company, Inc. Price, Consensus and EPS Surprise The Boston Beer Company, Inc. Price, Consensus and EPS Surprise | The Boston Beer Company, Inc. Quote Costs & Margins Gross profit improved 8.2% year over year to $116.9 million, while gross margin contracted 50 basis points to 51.9%.
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Click to get this free report Diageo plc (DEO): Free Stock Analysis Report The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report Nomad Foods Limited (NOMD): Free Stock Analysis Report The Simply Good Foods Company (SMPL): Free Stock Analysis Report To read this article on Zacks.com click here. Check These Diageo plc DEO has an expected long-term earnings growth rate of 8.4% and a Zacks Rank #1 (Strong Buy). The Boston Beer Company, Inc.SAM reported impressive fourth-quarter 2018 results, wherein earnings and revenues outpaced the Zacks Consensus Estimate.
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Check These Diageo plc DEO has an expected long-term earnings growth rate of 8.4% and a Zacks Rank #1 (Strong Buy). Click to get this free report Diageo plc (DEO): Free Stock Analysis Report The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report Nomad Foods Limited (NOMD): Free Stock Analysis Report The Simply Good Foods Company (SMPL): Free Stock Analysis Report To read this article on Zacks.com click here. Moreover, increases in Twisted Tea, Truly Hard Seltzer and Angry Orchard brands aided depletion growth, which was partly offset by fall in the Samuel Adams brand.
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2019-02-21 00:00:00 UTC
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ETFs and Stocks to Tap the Marijuana Boom
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DEO
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https://www.nasdaq.com/articles/etfs-and-stocks-tap-marijuana-boom-2019-02-21
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nan
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nan
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First it was bitcoin that made investors go on a mad rush, and today, it's marijuana. Now that legalization is steadily gaining traction across the U.S., more investors than ever before are looking for ways to cash in.
In the United States, 10 states and Washington, D.C., have currently legalized recreational marijuana, while 33 states have legalized marijuana for medical purposes. Last October saw Canada become the second country in the world to legalize the drug for both medical and recreational use-Uruguay was the first-and the first country among G-7 nations; Canadians can now buy and consume cannabis legally (read Canada Legalizes Marijuana: Two ETFs to Tap the Boom ).
Increasing legalization of recreational or medical marijuana has paved the way for a merger mania, spurring a large number of deal activities in the industry. International beer and beverage maker Constellation Brands STZ invested almost $4 billion to increase its stake in Canadian cannabis company Canopy Growth CGC last year. Additionally, beer and spirits giant Diageo DEO has reportedly been in active discussions with three unnamed marijuana companies, though no deal has been reached; however, there's been speculation that Diageo could change its course this year.
Molson Coors' TAP Canada division started a joint venture with cannabis producer Hydropothecary Corp. last year to develop marijuana drinks while Heineken's HENIY Lagunitas division launched a THC-infused sparkling water in California dispensaries last summer (read: Pot Stocks are on a High: Play These Marijuana ETFs ).
According to the Arcview Market Research, the U.S. legal cannabis market is projected to reach more than $23 billion by 2022. Per an analyst at Cowen, the U.S. legal cannabis industry is expected to bit $75 billion in sales by 2030, surpassing the carbonated soft drink market in 2017.
How to Play?
Given this, investors seeking to ride the ongoing green rush may want to tap the space. For them, we have highlighted a few stocks and ETFs that could be compelling picks.
ETFMG Alternative Harvest ETF MJ
This is the first and only pure ETF targeting the cannabis/marijuana industry. It tracks the Prime Alternative Harvest Index, designed to measure the performance of companies within the cannabis ecosystem, benefiting from global medicinal and recreational cannabis legalization initiatives. The fund holds 35 securities in its basket with double-digit concentration on the top two firms. Canadian firms make up 61% of the portfolio, while American firms comprise just 21%.
The ETF has AUM of $1.03 billion and trades in a good volume of around 935,000 shares. It charges 75 bps in annual fees and has surged almost 44% year-to-date.
GW Pharmaceuticals GWPH
This is a biopharmaceutical company focused on discovering, developing and commercializing therapeutics from its proprietary cannabinoid product platform in a broad range of disease areas. Its drug, Epidiolex, was the first cannabis-based treatment to be approved by the FDA.
The company has an estimated earnings growth rate of 42% for the next fiscal (ending on September 2020). It has a market cap of $4.4 billion and has gained 51.5% so far this year. GW Pharmaceuticals currently has a Zacks Rank #2 (Buy).
Cronos Group CRON
Cronos invests in firms that are licensed to produce and sell medical marijuana. With a market cap of nearly $4 billion billion, the stock has an estimated earnings growth of over 360% for the next year. It has surged almost 120% so far this year and carries a Zacks Rank #3 (Hold).
AdvisorShares VICE ETF ACT
Another way to play the upcoming boom in the marijuana industry is with ACT. It not only targets the cannabis industry but also offers concentrated exposure to "vices" including alcohol and tobacco. The fund invests in companies that derive at least 50% of their net revenues from the marijuana and hemp industry or have at least 50% of their company assets dedicated to lawful research and development of cannabis or cannabinoid-related products.
Specifically, the fund has 19% exposure to cannabis-related companies. It is an actively managed fund and has attracted $13.55 million in AUM since its debut in December 2017. ACT changes 75 bps in annual fees and trades in lower average daily volume of around 5,000 shares. It is up 17% in the year-to-date timeframe.
Innovative Industrial Properties IIPR
This REIT focuses on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities.
With more states in the United States giving cannabis the green light, Innovative Industrial Properties has incentive to acquire additional properties. Earnings are expected to grow 64.2% for the current year, and IIPR is up over 48% since January. IIPR is currently a #2 (Buy) on the Zacks Rank.
Zacks 2019 Marijuana Investors' Summit: In addition to the companies you learned about above, we invite you to learn more about investing in pot stocks. On Tuesday, February 26, our team of experts will reveal what we believe is the single best way to make money from legal marijuana. Register Now for Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Constellation Brands Inc (STZ): Free Stock Analysis Report
Diageo plc (DEO): Free Stock Analysis Report
Molson Coors Brewing Company (TAP): Free Stock Analysis Report
GW Pharmaceuticals PLC (GWPH): Free Stock Analysis Report
Innovative Industrial Properties, Inc. (IIPR): Free Stock Analysis Report
Canopy Growth Corporation (CGC): Free Stock Analysis Report
Cronos Group Inc. (CRON): Free Stock Analysis Report
ETFMG Alternative Harvest ETF (MJ): ETF Research Reports
AdvisorShares Vice ETF (ACT): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Additionally, beer and spirits giant Diageo DEO has reportedly been in active discussions with three unnamed marijuana companies, though no deal has been reached; however, there's been speculation that Diageo could change its course this year. Click to get this free report Constellation Brands Inc (STZ): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Molson Coors Brewing Company (TAP): Free Stock Analysis Report GW Pharmaceuticals PLC (GWPH): Free Stock Analysis Report Innovative Industrial Properties, Inc. (IIPR): Free Stock Analysis Report Canopy Growth Corporation (CGC): Free Stock Analysis Report Cronos Group Inc. (CRON): Free Stock Analysis Report ETFMG Alternative Harvest ETF (MJ): ETF Research Reports AdvisorShares Vice ETF (ACT): ETF Research Reports To read this article on Zacks.com click here. Increasing legalization of recreational or medical marijuana has paved the way for a merger mania, spurring a large number of deal activities in the industry.
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Click to get this free report Constellation Brands Inc (STZ): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Molson Coors Brewing Company (TAP): Free Stock Analysis Report GW Pharmaceuticals PLC (GWPH): Free Stock Analysis Report Innovative Industrial Properties, Inc. (IIPR): Free Stock Analysis Report Canopy Growth Corporation (CGC): Free Stock Analysis Report Cronos Group Inc. (CRON): Free Stock Analysis Report ETFMG Alternative Harvest ETF (MJ): ETF Research Reports AdvisorShares Vice ETF (ACT): ETF Research Reports To read this article on Zacks.com click here. Additionally, beer and spirits giant Diageo DEO has reportedly been in active discussions with three unnamed marijuana companies, though no deal has been reached; however, there's been speculation that Diageo could change its course this year. Last October saw Canada become the second country in the world to legalize the drug for both medical and recreational use-Uruguay was the first-and the first country among G-7 nations; Canadians can now buy and consume cannabis legally (read Canada Legalizes Marijuana: Two ETFs to Tap the Boom ).
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Click to get this free report Constellation Brands Inc (STZ): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Molson Coors Brewing Company (TAP): Free Stock Analysis Report GW Pharmaceuticals PLC (GWPH): Free Stock Analysis Report Innovative Industrial Properties, Inc. (IIPR): Free Stock Analysis Report Canopy Growth Corporation (CGC): Free Stock Analysis Report Cronos Group Inc. (CRON): Free Stock Analysis Report ETFMG Alternative Harvest ETF (MJ): ETF Research Reports AdvisorShares Vice ETF (ACT): ETF Research Reports To read this article on Zacks.com click here. Additionally, beer and spirits giant Diageo DEO has reportedly been in active discussions with three unnamed marijuana companies, though no deal has been reached; however, there's been speculation that Diageo could change its course this year. Last October saw Canada become the second country in the world to legalize the drug for both medical and recreational use-Uruguay was the first-and the first country among G-7 nations; Canadians can now buy and consume cannabis legally (read Canada Legalizes Marijuana: Two ETFs to Tap the Boom ).
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Additionally, beer and spirits giant Diageo DEO has reportedly been in active discussions with three unnamed marijuana companies, though no deal has been reached; however, there's been speculation that Diageo could change its course this year. Click to get this free report Constellation Brands Inc (STZ): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Molson Coors Brewing Company (TAP): Free Stock Analysis Report GW Pharmaceuticals PLC (GWPH): Free Stock Analysis Report Innovative Industrial Properties, Inc. (IIPR): Free Stock Analysis Report Canopy Growth Corporation (CGC): Free Stock Analysis Report Cronos Group Inc. (CRON): Free Stock Analysis Report ETFMG Alternative Harvest ETF (MJ): ETF Research Reports AdvisorShares Vice ETF (ACT): ETF Research Reports To read this article on Zacks.com click here. Last October saw Canada become the second country in the world to legalize the drug for both medical and recreational use-Uruguay was the first-and the first country among G-7 nations; Canadians can now buy and consume cannabis legally (read Canada Legalizes Marijuana: Two ETFs to Tap the Boom ).
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2019-02-15 00:00:00 UTC
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4 Reasons Why Marijuana Stocks & ETFs Could Be on a High in 2019
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DEO
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https://www.nasdaq.com/articles/4-reasons-why-marijuana-stocks-etfs-could-be-high-2019-2019-02-15
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Marijuana stocks and related ETFs, like the pure-play marijuana ETF ETFMG Alternative Harvest ETFMJ , caught enough investors' attention last year, courtesy of its mysterious rally in mid-2018 on Canada's legalization of recreational marijuana in October.
Like other stocks and funds, MJ did go through some rocky stretches last year due to bubble fears and some downbea t earnings releases, but it's been bouncing back nicely in the new year. So far, MJ is up around 40% since January.
In view of this, let's take a look at whether the space will be able to maintain its rally in 2019.
Legalization Taking Place Globally
Cannabis is getting official approval from many U.S. states for recreational uses, in addition to medical usage. Though pot remains entirely illegal at the federal level, Michigan approved a ballot measure during the midterm elections for recreational use of marijuana to become the 10 th state, while Missouri and Utah approved the legalization of medical marijuana. The total number of U.S. states greenlighting medical pot is now 33 (read: Why Marijuana Stocks & ETF Soared Today ).
Meanwhile, Canada became the first major world economy and the second country after Uruguay to legalize recreational marijuana. Also, the opening-up of several medical marijuana markets on the international level is pending. Meanwhile, things are looking up in Germany, the United Kingdom and Mexico.
Growing Potential of Cannabis in the Beverage Industry
Per an article published on Bloomberg, the marijuana and alcohol industries are gradually becoming a one-stop destination for recreation. Dan O'Neill, the former CEO of Molson Coors Brewing Co. TAP , believes that cannabis companies (once legalized fully in the United States) can see as huge of growth as alcohol after the ban ended, per a source .
The growing acceptance has led many brewers to come up with cannabis-induced beverages and ink deals with pot companies. Last August, U.S.-based Constellation BrandsSTZ - a leading producer of alcoholic beverages - announced an expansion of its stake in the biggest listed cannabis company Canopy GrowthCGC (read: Follow Constellation Brands, Bet Big on Cannabis ETFs ).
Soon after, there was news that the U.K.-based alcohol company Diageo PlcDEO would take part in discussions with at least three Canadian cannabis companies to buy a stake or form a partnership with one of them. The Canadian arm of Molson Coors and Quebec-based pot producer Hydropothecary Corp. announced their plan to make non-alcoholic, cannabis-infused beverages, as beer sales slowed down in North America.
Soft drink behemoth Coca-Cola CompanyKO is also reportedly " closely watching " the market for drinks infused with cannabidiol and is in talks with Canada's Aurora Cannabis ACB .
2018: A Big Year for Cannabis Deals
Apart from the Constellation Brands deal in August, other major deals included Marlboro cigarette maker Altria Group 's MO December announcement of an $1.8-billion investment in Canadian cannabis producer Cronos GroupCRON and Aurora Cannabis' expansion in Mexico with the acquisition of Farmacias Magistrales S.A. This expansion will allow Aurora to have access to the newly legal Mexican medical marijuana market .
Notably, Aurora made some other big acquisitions last year, including the purchase of Saskatchewan-based CanniMed Therapeutics in May and Ontario-based MedReleaf in July (read: Cronos-Altria Deal Boost Marijuana ETF: Will This Continue? ).
Moreover, there were deals like Aphria's APHA purchase of Nuuvera in March and Canopy Growth's CGC acquisition announcement of U.S.-based Ebbu Hemp. MedMen Enterprises lately agreed to buy medical cannabis company PharmaCann.
Bullish Analyst Take
Barclays is betting big on cannabis and revealed a position in Tilray TLRY , the Canadian marijuana company, in the third quarter as well as boosted its bet on Cronos. The bank has also eyed CGC stock through investments in beverage giant Constellation Brands.
Zacks 2019 Marijuana Investors' Summit: In addition to the companies you learned about above, we invite you to learn more about investing in pot stocks. On Tuesday, February 26, our team of experts will reveal what we believe is the single best way to make money from legal marijuana. Register Now for Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Constellation Brands Inc (STZ): Free Stock Analysis Report
Molson Coors Brewing Company (TAP): Free Stock Analysis Report
Diageo plc (DEO): Free Stock Analysis Report
Coca-Cola Company (The) (KO): Free Stock Analysis Report
Altria Group, Inc. (MO): Free Stock Analysis Report
Tilray, Inc. (TLRY): Free Stock Analysis Report
Cronos Group Inc. (CRON): Free Stock Analysis Report
Canopy Growth Corporation (CGC): Free Stock Analysis Report
Aphria Inc. (APHA): Get Free Report
Aurora Cannabis Inc. (ACB): Get Free Report
ETFMG Alternative Harvest ETF (MJ): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Soon after, there was news that the U.K.-based alcohol company Diageo PlcDEO would take part in discussions with at least three Canadian cannabis companies to buy a stake or form a partnership with one of them. Click to get this free report Constellation Brands Inc (STZ): Free Stock Analysis Report Molson Coors Brewing Company (TAP): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Coca-Cola Company (The) (KO): Free Stock Analysis Report Altria Group, Inc. (MO): Free Stock Analysis Report Tilray, Inc. (TLRY): Free Stock Analysis Report Cronos Group Inc. (CRON): Free Stock Analysis Report Canopy Growth Corporation (CGC): Free Stock Analysis Report Aphria Inc. (APHA): Get Free Report Aurora Cannabis Inc. (ACB): Get Free Report ETFMG Alternative Harvest ETF (MJ): ETF Research Reports To read this article on Zacks.com click here. TAP , believes that cannabis companies (once legalized fully in the United States) can see as huge of growth as alcohol after the ban ended, per a source .
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Click to get this free report Constellation Brands Inc (STZ): Free Stock Analysis Report Molson Coors Brewing Company (TAP): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Coca-Cola Company (The) (KO): Free Stock Analysis Report Altria Group, Inc. (MO): Free Stock Analysis Report Tilray, Inc. (TLRY): Free Stock Analysis Report Cronos Group Inc. (CRON): Free Stock Analysis Report Canopy Growth Corporation (CGC): Free Stock Analysis Report Aphria Inc. (APHA): Get Free Report Aurora Cannabis Inc. (ACB): Get Free Report ETFMG Alternative Harvest ETF (MJ): ETF Research Reports To read this article on Zacks.com click here. Soon after, there was news that the U.K.-based alcohol company Diageo PlcDEO would take part in discussions with at least three Canadian cannabis companies to buy a stake or form a partnership with one of them. Last August, U.S.-based Constellation BrandsSTZ - a leading producer of alcoholic beverages - announced an expansion of its stake in the biggest listed cannabis company Canopy GrowthCGC (read: Follow Constellation Brands, Bet Big on Cannabis ETFs ).
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Click to get this free report Constellation Brands Inc (STZ): Free Stock Analysis Report Molson Coors Brewing Company (TAP): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Coca-Cola Company (The) (KO): Free Stock Analysis Report Altria Group, Inc. (MO): Free Stock Analysis Report Tilray, Inc. (TLRY): Free Stock Analysis Report Cronos Group Inc. (CRON): Free Stock Analysis Report Canopy Growth Corporation (CGC): Free Stock Analysis Report Aphria Inc. (APHA): Get Free Report Aurora Cannabis Inc. (ACB): Get Free Report ETFMG Alternative Harvest ETF (MJ): ETF Research Reports To read this article on Zacks.com click here. Soon after, there was news that the U.K.-based alcohol company Diageo PlcDEO would take part in discussions with at least three Canadian cannabis companies to buy a stake or form a partnership with one of them. Marijuana stocks and related ETFs, like the pure-play marijuana ETF ETFMG Alternative Harvest ETFMJ , caught enough investors' attention last year, courtesy of its mysterious rally in mid-2018 on Canada's legalization of recreational marijuana in October.
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Soon after, there was news that the U.K.-based alcohol company Diageo PlcDEO would take part in discussions with at least three Canadian cannabis companies to buy a stake or form a partnership with one of them. Click to get this free report Constellation Brands Inc (STZ): Free Stock Analysis Report Molson Coors Brewing Company (TAP): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Coca-Cola Company (The) (KO): Free Stock Analysis Report Altria Group, Inc. (MO): Free Stock Analysis Report Tilray, Inc. (TLRY): Free Stock Analysis Report Cronos Group Inc. (CRON): Free Stock Analysis Report Canopy Growth Corporation (CGC): Free Stock Analysis Report Aphria Inc. (APHA): Get Free Report Aurora Cannabis Inc. (ACB): Get Free Report ETFMG Alternative Harvest ETF (MJ): ETF Research Reports To read this article on Zacks.com click here. Marijuana stocks and related ETFs, like the pure-play marijuana ETF ETFMG Alternative Harvest ETFMJ , caught enough investors' attention last year, courtesy of its mysterious rally in mid-2018 on Canada's legalization of recreational marijuana in October.
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2019-02-14 00:00:00 UTC
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Why Marijuana ETFs are on a High in 2019
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DEO
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https://www.nasdaq.com/articles/why-marijuana-etfs-are-high-2019-2019-02-14
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After being beaten down in the final quarter of 2018, pot stocks staged a nice comeback at the start of this year on the renewed appeal for riskier assets. Notably, these stocks recorded their third consecutive week of gains, the longest winning streak since August. ETFMG Alternative Harvest ETF MJ - the first and only pure ETF targeting the cannabis/marijuana industry - has climbed almost 38% so far this year (read: Best & Worst Performing ETFs to Start 2019 ).
The massive strength came despite disappointing earnings from Aurora Cannabis ACB and Aphria APHA . This is because investors are capitalizing on the huge potential of the global cannabis industry with the beaten-down stocks.
MJ in Focus
The fund tracks the Prime Alternative Harvest Index, designed to measure the performance of companies within the cannabis ecosystem, benefiting from global medicinal and recreational cannabis legalization initiatives. The fund holds 37 securities in its basket and Canadian firms make up for 57% of the portfolio, while American firms comprise 33%. The ETF has AUM of $756.5 million and trades in a good volume of around 820,000 shares. It charges 75 bps in annual fees.
Inside the Surge
The pot industry is emerging and poised for rapid growth given its widespread legality. Though cannabis remains illegal at the federal level in the United States, 10 states and Washington D.C. have legalized recreational marijuana while 33 states have legalized medical weed. Recreational marijuana is expected to be legal soon for adults over the age of 21 years in New York as well (read: After a Landmark 2018, Will Pot ETF See Same High in 2019? ).
Canada is the second country in the world to legalize the drug for both medical and recreational use, trailing Uruguay and the first country among the G-7 nations. In late November, the European nation of Luxembourg announced that marijuana would soon be legalized for recreational use by adult residents.
Additionally, with the FDA's approval of the first cannabis-derived drug from GW Pharmaceuticals GWPH and President Trump's signing of the Farm Bill that legalized hemp and hemp-based cannabidiol (CBD) oil, the cannabis industry looks more encouraging. All these developments have spurred a large number of deal activities, including mergers and acquisitions in the industry.
A number of alcoholic beverage companies are investing or partnering with cannabis producers. Among the latest deal, Aurora Cannabis agreed to buy Whistler Medical Marijuana Corp. in a stock deal valued at up to C$175 million ($131.8 million). Canopy Growth CGC plans to invest up to $150 million in New York to target the emerging market for cannabis products derived from hemp and CannTrust CNTFF plans to list its shares on the New York Stock Exchange. Meanwhile, Marlboro cigarette maker Altria Group MO recently purchased a 45% stake in Canadian cannabis firm Cronos Group CRON (read: Cronos-Altria Deal Boost Marijuana ETF: Will This Continue? ).
Further, Coca-Cola KO and Diageo DEO have been eyeing for a stake or forming partnership to produce cannabis-infused beverages. Constellation Brands STZ has already invested $3.8 billion to increase its stake in Canopy Growth.
According to Arcview Market Research, the U.S. legal cannabis market is projected to reach $11 billion in consumer spending this year and more than $23 billion by 2022. Per an analyst at Cowen, the U.S. legal cannabis industry is expected to reach $80 billion in sales by 2030, surpassing the carbonated soft drink market in 2017. An analyst at Haywood Securities foresees exponential growth in cannabis stocks with the U.S. cannabis market expected to be worth between $15.9 million and $21.7 billion by the year 2022 (read: Another Cannabis ETF on the Way ).
Zacks 2019 Marijuana Investors' Summit: In addition to the companies you learned about above, we invite you to learn more about investing in pot stocks. On Tuesday, February 26, our team of experts will reveal what we believe is the single best way to make money from legal marijuana. Register Now for Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Constellation Brands Inc (STZ): Free Stock Analysis Report
Diageo plc (DEO): Free Stock Analysis Report
Coca-Cola Company (The) (KO): Free Stock Analysis Report
GW Pharmaceuticals PLC (GWPH): Free Stock Analysis Report
Altria Group, Inc. (MO): Free Stock Analysis Report
Cronos Group Inc. (CRON): Free Stock Analysis Report
Canopy Growth Corporation (CGC): Free Stock Analysis Report
Aurora Cannabis Inc. (ACB): Get Free Report
ETFMG Alternative Harvest ETF (MJ): ETF Research Reports
Aphria Inc. (APHA): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Further, Coca-Cola KO and Diageo DEO have been eyeing for a stake or forming partnership to produce cannabis-infused beverages. Click to get this free report Constellation Brands Inc (STZ): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Coca-Cola Company (The) (KO): Free Stock Analysis Report GW Pharmaceuticals PLC (GWPH): Free Stock Analysis Report Altria Group, Inc. (MO): Free Stock Analysis Report Cronos Group Inc. (CRON): Free Stock Analysis Report Canopy Growth Corporation (CGC): Free Stock Analysis Report Aurora Cannabis Inc. (ACB): Get Free Report ETFMG Alternative Harvest ETF (MJ): ETF Research Reports Aphria Inc. (APHA): Get Free Report To read this article on Zacks.com click here. After being beaten down in the final quarter of 2018, pot stocks staged a nice comeback at the start of this year on the renewed appeal for riskier assets.
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Click to get this free report Constellation Brands Inc (STZ): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Coca-Cola Company (The) (KO): Free Stock Analysis Report GW Pharmaceuticals PLC (GWPH): Free Stock Analysis Report Altria Group, Inc. (MO): Free Stock Analysis Report Cronos Group Inc. (CRON): Free Stock Analysis Report Canopy Growth Corporation (CGC): Free Stock Analysis Report Aurora Cannabis Inc. (ACB): Get Free Report ETFMG Alternative Harvest ETF (MJ): ETF Research Reports Aphria Inc. (APHA): Get Free Report To read this article on Zacks.com click here. Further, Coca-Cola KO and Diageo DEO have been eyeing for a stake or forming partnership to produce cannabis-infused beverages. Canopy Growth CGC plans to invest up to $150 million in New York to target the emerging market for cannabis products derived from hemp and CannTrust CNTFF plans to list its shares on the New York Stock Exchange.
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Click to get this free report Constellation Brands Inc (STZ): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Coca-Cola Company (The) (KO): Free Stock Analysis Report GW Pharmaceuticals PLC (GWPH): Free Stock Analysis Report Altria Group, Inc. (MO): Free Stock Analysis Report Cronos Group Inc. (CRON): Free Stock Analysis Report Canopy Growth Corporation (CGC): Free Stock Analysis Report Aurora Cannabis Inc. (ACB): Get Free Report ETFMG Alternative Harvest ETF (MJ): ETF Research Reports Aphria Inc. (APHA): Get Free Report To read this article on Zacks.com click here. Further, Coca-Cola KO and Diageo DEO have been eyeing for a stake or forming partnership to produce cannabis-infused beverages. Canopy Growth CGC plans to invest up to $150 million in New York to target the emerging market for cannabis products derived from hemp and CannTrust CNTFF plans to list its shares on the New York Stock Exchange.
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Further, Coca-Cola KO and Diageo DEO have been eyeing for a stake or forming partnership to produce cannabis-infused beverages. Click to get this free report Constellation Brands Inc (STZ): Free Stock Analysis Report Diageo plc (DEO): Free Stock Analysis Report Coca-Cola Company (The) (KO): Free Stock Analysis Report GW Pharmaceuticals PLC (GWPH): Free Stock Analysis Report Altria Group, Inc. (MO): Free Stock Analysis Report Cronos Group Inc. (CRON): Free Stock Analysis Report Canopy Growth Corporation (CGC): Free Stock Analysis Report Aurora Cannabis Inc. (ACB): Get Free Report ETFMG Alternative Harvest ETF (MJ): ETF Research Reports Aphria Inc. (APHA): Get Free Report To read this article on Zacks.com click here. A number of alcoholic beverage companies are investing or partnering with cannabis producers.
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2019-02-13 00:00:00 UTC
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10 ‘Buy-and-Hold’ Stocks to Own Forever
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DEO
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https://www.nasdaq.com/articles/10-buy-and-hold-stocks-to-own-forever-2019-02-13
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
[Editor's note: This story was previously published in July 2018. It has since been updated and republished.]
Investing to "buy and hold" is trickier than it looks. The increasing pace of technological change means even the most successful, dominant companies have to continually adapt to keep up. Industries like energy, real estate and even consumer products are facing potentially significant long-term changes going forward. In any era, amassing a collection of retirement stocks simply by buying the best companies and holding them for years can be a risky endeavor.
General Motors (NYSE: GM ) was a classic "widows and orphans" stock until last decade when GM wound up going bankrupt. United States Steel (NYSE: X ) once was a pillar of corporate America and a buy-and-hold stock. GM shares basically haven't moved in a quarter of a century. Polaroid and Eastman Kodak (NYSE: KODK ) were once blue-chip stocks. Both went bankrupt as cameras changed from film to digital.
But there still are stocks to buy and hold out there that can last forever, while offering dividend income along the way.
9 U.S. Stocks That Are Coming to Life Again
Here are 10 such retirement stocks to hold forever.
Source: Shutterstock
Bank of America (BAC)
Dividend Yield: 2.7%
It might seem strange to open the list with Bank of America (NYSE: BAC ). After all, we're less than a decade on from the financial crisis. During that crisis, BofA acquisition Countrywide Financial blew up in spectacular fashion, after pioneering many of the risky tactics that led to the bubble and subsequent bust.
But this is a different BofA.
Net consumer charge-offs hit a decade-long low in the company's second quarter. Performance on credit metrics continues to improve across the portfolio. The Merrill Lynch unit is posting record margins. Government regulations have been criticized as slowing growth - but they've undoubtedly lowered risk as well, even if observers might argue that a better balance is needed.
No less than Warren Buffett is now BofA's largest shareholder , through his Berkshire Hathaway Inc. (NYSE: BRK.A , NYSE: BRK.B ). And the Oracle of Omaha is fond of saying that his favorite holding period is "forever."
That seems likely true for BAC stock as well.
Source: Mustafa Khayat Via Flickr
Diageo (DEO)
Dividend Yield: 1.75%
Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by Diageo (NYSE: DEO ) are well-positioned to adapt to shifting tastes.
Diageo owns classic brands like Johnnie Walker whisky, Tanqueray gin, Smirnoff vodka, and Harp and Guinness beer, among many others. What most have in common is a timeless quality and worldwide brand recognition. As a result, while beverage giants like Coca-Cola (NYSE: KO ) and Anheuser Busch InBev (NYSE: BUD ) have struggled with earnings growth, Diageo grew net income by 13.5% in fiscal 2018 and expects consistent growth going forward.
Buy These 5 Stocks to Play the Megatrend of the Century
Yet at a sub-20x forward multiple, and with a dividend yield approaching 2%, Diageo stock isn't all that dearly valued. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
Source: U.S. Embassy Kyiv Ukraine via Flickr (Modified)
Medtronic (MDT)
Dividend Yield: 2.21%
In this day and age, the U.S. healthcare market in particular seems potentially volatile. Concerns about increased spending and political battles over the Affordable Care Act create more questions than answers.
But even with that uncertainty, Medtronic (NYSE: MDT ) isn't going anywhere. The company's devices are an integral part of modern medicine, ranging from pacemakers to stents to bone grafts to imaging systems.
Even the risks involved in the sector look priced into MDT. Medtronic's days of double-digit annual growth may well be behind it, but it's not finished increasing earnings or dividends. MDT stock likely isn't finished rising, either.
Source: Shutterstock
NextEra Energy (NEE)
Dividend Yield: 2.42%
Utility stocks are among the most common safe, buy-and-hold stocks. NextEra Energy (NYSE: NEE ) is now the largest electric utility in the U.S. by market capitalization. That might actually be the only problem with NEE stock.
NextEra shares gained 7.6% year-to-date, and trades just off record highs. Potential valuation concerns aside, NextEra looks like a winner. It serves customers in the southern Florida region, still one of the nation's fastest-growing areas. A 21x forward P/E multiple is high for the space but not outlandishly so. And a 2.7% dividend yield provides income along the way.
10 Best Dividend Stocks to Buy for the Next 10 Months
Investors looking for value in the space might look for a smaller play like cheaper Dominion Energy (NYSE: D ). But it's usually worth paying for quality, and NextEra Energy looks like one of the best utility stocks out there.
Source: Blue Genie via Flickr
Dividend Yield: 1.7%
McCormick & Company (NYSE: MKC ) is another quality company whose valuation might spook some investors. But MKC stock very rarely is offered cheap; if it gets below $122, you should consider buying and holding this stock.
The company's market leadership in spices and seasonings provides both an impressive moat and protection against economic downturns. MKC stock did dip after the company acquired French's mustard and Frank's RedHot sauce from Reckitt Benckiser (OTCMKTS: RBGLY ) at a price that looked a bit high to many investors. But MKC has recovered those gains and then some.
Top-line growth for McCormick likely isn't going to be explosive, but it will be steady. The same has been true of MKC stock, which has returned an average of 13% a year over the past decade, including dividends.
With continuous cost-cutting initiatives, the contribution from the acquired brands and organic growth (and growth in organic products), MKC still should be able to provide double-digit annual returns going forward as well.
Source: Shutterstock
Dividend Yield: 2.13%
Allstate Corp (NYSE: ALL ) long has used the tagline, "You're in good hands," and it's true for Allstate investors as well. ALL stock has almost quadrupled from late-2011 lows. And there could be more upside to come.
After all, Allstate isn't particularly expensive, trading at a 15.9 P/E.
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Once any short-term worries subside, ALL should resume its march upward.
Source: Shutterstock
International Flavors & Fragrances (IFF)
Dividend Yield: 1.99%
International Flavors & Fragrances (NYSE: IFF ) is a company most consumers encounter every day without knowing it and many investors aren't exactly hip to it, either.
As its name suggests, the company develops flavors & fragrances across 13 categories, including cosmetics, perfumes, beverages and sweet flavors. Sales and earnings have increased consistently and so has IFF's share price. At a26.79 P/E, IFF does look a bit pricey. But, as with McCormick and other stocks on this list, investors should pay for quality.
IFF's hidden, but key role, in so many industries, gives it a great deal of protection against both competition and macro factors. Acquisitions and a growing cosmetic additive business both provide room for growth.
Consumers may not know IFF, but investors should.
Source: Shutterstock
Dividend Yield: 1.15%
Lamb Weston (NYSE: LW ) was spun off from Conagra Brands (NYSE: CAG ) last year. Lamb Weston is the No. 1 potato producer in the United States. In fact, it manufactures the well-known fries at McDonald's (NYSE: MCD ), among other restaurant chains.
Lamb Weston also has a consumer business (including a small segment that manufactures frozen vegetables), while serving restaurants of all sizes. Health concerns might seem a long-term headwind against the business, but growth has been steady for years, and margins continue to improve.
LW is targeting international markets for growth, as French fries have much more limited penetration, while international audiences generally are intrigued by Americanized products.
Despite growth and leading market share, LW stock isn't particularly cheap, trading at about 21x next year's earnings. The company did pick up a fair amount of debt in the CAG spinoff. But it's paying that debt down, which should lower interest expense and boost cash flow going forward.
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With many similar stocks trading at much higher multiples, LW seems to have room for upside. And international growth should offset any health-related concerns in the U.S., should they arise. America's love affair with French fries isn't going to suddenly end, and that should ensure years of stability for Lamb Weston at least.
Source: Shutterstock
Fortune Brands (FBHS)
Dividend Yield: 1.86%
Investors are commonly advised to diversify their portfolio. Fortune Brands Home & Security (NYSE: FBHS ) has done just that. The company operates in four segments: Cabinets, Plumbing, Doors, and Security. Among its well-known brands are Moen in plumbing, and MasterLock in security.
FBHS is more of a cyclical stock than most on this list, and the company no doubt has benefited from the steady, if slow, housing recovery in the U.S. But the company's products also generate relatively stable replacement demand, and a 1.86% dividend yield provides modest, but growing, income.
Fortune Brands has been an impressive company since its founding and a solid stock since its 2011 IPO. There may be a bit more volatility here, but that's a worthwhile price to pay for long-term investors. There's enough value in Fortune Brands to ride out any market jitters.
Source: Shutterstock
Dividend Yield: 1.94%
Republic Services (NYSE: RSG ) is a bit smaller and likely a lot less well-known than rival Waste Management (NYSE: WM ). But in this case, that's not necessarily a bad thing.
Republic Services has outgrown its larger competitor in both sales and earnings over the past five years. RSG stock has modestly outperformed WM over the same period as well. Investors appear to believe that will continue, as Republic Services is valued a bit higher than Waste Management, at least based on forward earnings multiples.
Both RSG and WM are solid long-term plays. Contracted revenue and steady demand should support both companies for years to come. There's room for further acquisitions in a relatively fragmented space. Republic Services gets the nod here due to slightly better growth and more room for margin improvement.
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But investors looking for safe, stable growth can't go wrong with either RSG or WM.
As of this writing, Vince Martin was long MKC.
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The post 10 'Buy-and-Hold' Stocks to Own Forever appeared first on InvestorPlace .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Source: Mustafa Khayat Via Flickr Diageo (DEO) Dividend Yield: 1.75% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by Diageo (NYSE: DEO ) are well-positioned to adapt to shifting tastes. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
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Source: Mustafa Khayat Via Flickr Diageo (DEO) Dividend Yield: 1.75% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by Diageo (NYSE: DEO ) are well-positioned to adapt to shifting tastes. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
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Source: Mustafa Khayat Via Flickr Diageo (DEO) Dividend Yield: 1.75% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by Diageo (NYSE: DEO ) are well-positioned to adapt to shifting tastes. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
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Source: Mustafa Khayat Via Flickr Diageo (DEO) Dividend Yield: 1.75% Change has come to the alcohol industry, with the number of breweries exploding worldwide and new distilleries popping up as well. The brands owned by Diageo (NYSE: DEO ) are well-positioned to adapt to shifting tastes. Long-term investors would do well to own DEO and perhaps use the dividends to buy a bottle or two of fine whisky.
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