Top Beer Stocks for Q1 2020

The beer industry is made up of companies specializing in the production of beer, but which also produce other alcoholic and non-alcoholic beverages. Beverages are considered consumer staples and thus the beer industry may be considered a small part of the broader consumer staples sector. Some of well-known names in the industry include Netherlands-based SABMiller International BV, Netherlands-based Heineken NV, and Molson Coors Beverage Co. (TAP). Consumer staples stocks, as represented by the Consumer Staples Select Sector SPDR ETF (XLP), have underperformed the broader market, rising 22.0% compared to the S&P 500's gain of 26.4% over the past 12 months. 

Here are the top 3 beer stocks with the best value, the fastest earnings growth, and the most momentum. All figures in this story are as of January 12, 2020.

These are the beer stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

• United Breweries Co. Inc.: United Breweries, also known as Compania Cervecerias Unidas, is a Chile-based producer and distributor of a wide range of branded beers. The company also produces wines, spirits, and non-alcoholic beverages such as soft drinks, bottled water, and juices. The company reported meager revenue growth for Q3 2019 of 0.5% compared to same quarter a year ago. Earnings per share (EPS) decline 55.5% versus the same three-month period of 2018.
• Anheuser-Busch InBev SA/NV: Anheuser-Busch is a Belgium-based holding company engaged in the manufacture and distribution of alcoholic and non-alcoholic beverages. The company owns a portfolio of more than 400 different beer brands including Budweiser, Corona, and Stella Artois.
• Ambev SA: Ambev is a Brazil-based company primarily engaged in the production and distribution of beer. The company also produces and distributes soft drinks and other non-alcoholic beverages including non-carbonated beverages. The company reported revenue growth for Q3 2019 of 8.1% and an EPS decline of 11.6% compared to the year earlier.

These are the beer stocks with the highest year-over-year (YOY) EPS growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.

• Anheuser-Busch InBev SA/NV: See above for company description.
• Constellation Brands Inc.: Constellation Brands is an alcoholic beverage company engaged in the production, marketing, and distribution of beer, wine, and spirits. The company announced early last month that Garth Hankinson has been promoted to Executive Vice President and Chief Financial Officer (CFO), effective January 13, 2020. Hankinson will take over the role from David Klein, who will become the Chief Executive Officer (CEO) at Canopy Growth.
• Boston Beer Co. Inc.: Boston Beer is a brewer engaged in the business of producing and selling craft-brewed beers and cider products at its own breweries and various other contract breweries. The company reported YOY revenue growth of 23.3% and YOY EPS growth of 13.7% for Q3 2019.

These are the beer stocks that had the highest price change the last 12 months.

• Boston Beer Co. Inc.: See above for company description.
• Carlsberg A/S: Carlsberg is a Denmark-based brewing company primarily engaged in the production and marketing of beer. The company also produces non-alcoholic beverages such as non-alcoholic beer and soft drinks. The company's portfolio of brands include Carlsberg, Kronenbourg, and Tuborg, among others.
• Constellation Brands Inc.: See above for company description.