Top Beer Stocks for Q4 2020

The beer industry is made up of companies specializing in the production of beer, although many of them produce other alcoholic and non-alcoholic beverages. Some of the well-known names include Netherlands-based SABMiller International BV, Belgium-based Anheuser-Busch InBev NV (BUD), and Molson Coors Beverage Co. (TAP). Demand for beer, a beverage, historically has remained stable throughout economic cycles. As a result, the beer industry is part of the much broader consumer staples sector.

Unlike past economic downturns, the steep recession in 2020 was spurred by the health crisis related to COVID-19. This has dramatically changed consumer behavior worldwide, sharply lowering beer demand in many regions.

Beer stocks, as represented by the Consumer Staples Select Sector SPDR ETF (XLP), have underperformed the broader market. XLP has provided a total return of 9.6% over the past 12 months, below the Russell 1000's total return of 15.2%, as of September 14, 2020. All statistics in the tables below are as of September 15.

Here are the top 3 beer stocks with the best value, growth, and performance.

Best Value Beer Stocks

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.

Source: YCharts

• Kirin Holdings Co. Ltd.: Kirin Holdings is a Japan-based producer of beer, soft drinks, juice, food products, wine, whiskey, and pharmaceuticals.
• 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. Ambev reported a 51.4% decline in profit on a 4.4% decline in revenue in Q2 2020, which ended June 30, 2020. The company noted that its profitability was affected by significant changes in consumer behavior that began in mid-March resulting from the impact of the COVID-19 pandemic.
• 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. United Breweries reported a net loss as net sales fell 15.6% in Q2 2020, which ended June 30, 2020. The company said that its business during the quarter was deeply affected by the impact of the pandemic.

Beer Stocks With the Most Profit Growth or Least Profit Decline

These are the beer stocks with the highest year-over-year (YOY) earnings per share (EPS) growth or lowest EPS decline for the most recent quarter. A company’s ability to maintain profitability in a difficult business environment can be a sign of good management and/or a strong business model.

Source: YCharts

• 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 as well as contract breweries. The company reported net income growth of 115.9% on net revenue growth of 42.0% in Q2 2020, which ended June 27, 2020. Boston Beer indicated that it withdrew its full-year fiscal 2020 financial guidance due to the uncertainties resulting from COVID-19.
• Molson Coors Beverage Co.: Molson Coors is a holding company that produces and sells beer. Some of its brands include Coors Light, Miller Lite, and Molson Canadian. Molson Coors reported a 40.8% decline in net income on a 15.1% decline in net sales in Q2 2020, which ended June 30, 2020. The company said that its volumes were significantly affected by the pandemic.
• Kirin Holdings Co. Ltd.: See above for company description.

Beer Stocks with the Best Performance

These are the beer stocks that had the best returns or smallest declines in total return over the past 12 months out of the companies we looked at.

Source: YCharts

• Boston Beer Co. Inc.: See above for company description.
• Craft Brew Alliance Inc.: Craft Brew Alliance is an independent craft brewing company. It operates breweries with adjacent restaurants and pubs, and offers a wide assortment of beers.
• Constellation Brands Inc.: Constellation Brands is an alcoholic beverage company engaged in the production, marketing, and distribution of beer, wine, and spirits. The company recently announced that it has acquired the Copper & Kings American Brandy Co., a Kentucky-based distillery that produces American Brandy, absinthe, gin, and Destillaré liqueurs.