According to food industry consultant Technomic, Skinnygirl was the fastest growing brand of spirits in the U.S. in 2011, selling 586,000 9-liter cases. Americans bought 3.5% more spirits in 2011 than the year before. The Skinnygirl brand was created by reality star Bethenny Frankel and sold to Beam Inc. (NYSE:BEAM) in 2011. In terms of U.S. market share, Beam is second only to Diageo (NYSE:DEO) at 9.8%.

As a rum lover, I don't particularly care for either of Beam's brands (Cruzan, Ronrico) or Diageo's (Captain Morgan). Instead, I prefer the Cuban flavors of Havana Club, a 50/50 partnership between Pernod-Ricard (OTCBB:PDRDY.PK) and the Cuban government. I'm able to enjoy their rums, which are unavailable in the U.S. Pernod-Ricard, the world's leading seller of premium and prestige spirits is traded over-the-counter. For those interested in something other than the pink sheets, here are three additional ways to play its stock.

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

Option # 1
In May 2011, Power Corporation (OTCBB:PWCDF.PK) looked like a stock with hidden value in its stock. As a holding company that owns majority control of several Canadian financial institutions through Power Financial (TSX:PWF.TO) as well as separate investments in Canada, Europe and Asia, it tends to trade at a discount because of its conglomerate-like structure. Pernod-Ricard comes into play through its 50% interest in another holding company, Parjointco NV, which is based in the Netherlands.

Parjointco owns 76% of Pargesa Holding's voting rights and 56.5% of its equity. Pargesa in turn owns 52% of Groupe Bruxelles Lambert, itself a holding company on the Brussels Stock Exchange. GBL, for short, owns 7.5% of Pernod-Ricard stock after recently selling 6.2 million shares for a capital gain of 240 million euros. At the end of this convoluted trail, Power Corporation shareholders end up with slightly less than 1% of Pernod-Ricard's shares without paying an annual management fee like you would with a mutual fund or ETF. In addition, you get a stock whose dividend yield is 4.4% as of May 4, and higher than it's been for most of the last decade. Income investors will definitely like the stability of its dividend payout.

SEE: The Advantages of Mutual Funds

Option #2
Even though it is the second largest liquor company in the world, there aren't too many options when it comes to exchange-traded funds. The first of two ETF options is the SPDR S&P International Consumer Staples Sector ETF (ARCA:IPS), which owned 2.49 million shares as of the end of March, representing a 1.7% weighting. Other alcohol-related companies in the fund's holdings include Anheuser-Busch InBev (NYSE:BUD), Carlsberg A/S, Foster's Group, Asahi Breweries, Kirin Holdings, Diageo, Heineken NV and SABMiller. While mostly focused on beer companies, Pernod-Ricard and Diageo are almost 7% of the fund's assets, giving investors a reasonable representation of the global liquor business, not to mention other great businesses like Nestle and Danone. I'd take this fund over the next suggestion because it's global in nature.

SEE: An Inside Look At ETF Construction

Option # 3
As recently 2004, a closed-end fund traded on the New York Stock Exchange that owned Pernod-Ricard stock. Unfortunately, the France Growth Fund Inc., managed by Credit Agricole Asset Management, was liquidated in June of that year. The next and best bet is to own the iShares MSCI France Index Fund (ARCA:EWQ), which replicates the holdings and performance of the index of the same name. At present, Pernod-Ricard's weighting represents 2.29% of the 73-stock portfolio. It's questionable how many investors would want to buy this country-specific fund over Germany, but for those who want to benefit from the continued success Pernod-Ricard is experiencing in the global liquor business, this is a third way to do so.

SEE: Open Your Eyes To Closed-End Funds

The Bottom Line
In recent years, Pernod-Ricard's focused its efforts on its Top 14 brands, which includes Havana Club. In the first six months of fiscal 2012 ending Dec. 31, 2011, its Top 14 brands generated 61% of its sales, growing 9% year-over-year in terms of volume and 14% in terms of value. It continues to grow profits at double-digit rates, allowing it to pay down some of the debt it incurred by buying Absolute Vodka in 2008. While Diageo is more popular with investment managers, that shouldn't stop you from considering its equally successful competitor. Both companies are at the top of their games these days.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, Will Ashworth did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Mutual Funds & ETFs

    The Top Vanguard Emerging Market ETF

    Learn why growth investors should consider investing in VWO's portfolio of emerging market stocks.
  2. Stock Analysis

    8 Solid Utility Stocks for a Bear Market

    If you're seeking modest appreciation, generous dividend payments and resiliency, consider these eight utility stocks.
  3. Investing Basics

    How to Pick the Best Muni Bonds and Muni Bond ETFs

    Municipal bonds are a good addition to a diversified portfolio as long as you choose correctly based on population and local economic trends.
  4. Stock Analysis

    Why Phillips 66 (PSX) is a Solid Long-Term Bet

    Here's why Phillips 66 will likely remain one of the world’s largest and most profitable companies for a long time to come.
  5. Mutual Funds & ETFs

    Top 3 Emerging Markets Bond Mutual Funds

    Discover detailed analysis of the top three mutual funds offering exposure to the emerging markets bonds, and learn about the suitability of these funds.
  6. Stock Analysis

    3 Resilient Oil Stocks for a Down Market

    Stuck on oil? Take a look at these six stocks—three that present risk vs. three that offer some resiliency.
  7. Economics

    Keep an Eye on These Emerging Economies

    Emerging markets have been hammered lately, but these three countries (and their large and young populations) are worth monitoring.
  8. Stock Analysis

    Is Pepsi (PEP) Still a Safe Bet?

    PepsiCo has long been known as one of the most resilient stocks throughout the broader market. Is this still the case today?
  9. Investing

    The ABCs of Bond ETF Distributions

    How do bond exchange traded fund (ETF) distributions work? It’s a question I get a lot. First, let’s explain what we mean by distributions.
  10. Investing Basics

    Top Tips for Diversifying with Exotic Currencies

    Is there an opportunity in exotic currencies right now, or are you safer sticking to the major ones?
  1. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
  2. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  3. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  4. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  5. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  6. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!