It’s one of the “Sin” segment of stocks that some investors would prefer not to invest in but the dividend returns are nothing to sneeze at. They’re well established companies with good track records and have been paying a decent dividend for years. It’s worth taking a look.
For many companies, brand awareness is the make or break factor that contributes to their success. In the alcoholic beverage industry, the same rules apply. Brown-Forman (NYSE:BF.B), Anheuser-Busch InBev (NYSE:BUD), and Diageo plc (NYSE:DEO) have survived all these years because they own widely known brands such as Jack Daniels, Bud Light, and Captain Morgan. The growth at these companies has slowed considerably over the years, but due to the nature of the business, there is a large barrier to entry. For many of these brands, the process of making the alcohol takes years, so it is quite difficult for competitors to enter the market and become immediately successful. Although the growth has slowed, similar to tobacco stocks, the alcoholic beverage companies continue to generate stable cash flow that is in return handed over to investors, a trend that looks to be ongoing for years to come.
In this article I will highlight three dividend companies in the alcoholic beverage industry and focus on their results from the latest quarter as well as their dividend growth potential.