Top Performing Alcohol Stocks

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Are you looking to invest in the alcohol industry? With the growing popularity of alcoholic beverages, it’s no surprise that alcohol stocks have become an attractive option for investors. But with so many options out there, how do you know which alcohol stocks are the best ones to invest in?

The alcohol industry is a lucrative market, with global alcohol sales reaching billions of dollars each year. From beer and spirits to wine and craft cocktails, you can choose from a wide range of alcoholic beverages. As a result, the alcohol industry has seen significant growth, making it an appealing sector for investors.

To help you make informed investment decisions, Benzinga has compiled a list of the best alcohol stocks that show promising potential for growth and profitability. Whether you’re a seasoned investor or just starting out, this article offers valuable insights into the top alcohol stocks to consider for your investment portfolio.

Quick Look at Top Performing Alcohol Stocks:

Pros

Alcohol stocks offer investors the potential for good returns as well as stability. Here are other potential benefits:

• High demand: Alcohol is a popular and widely consumed product, making it a stable and profitable industry to invest in. Regardless of economic conditions, people tend to continue purchasing alcohol, making it a recession-resistant investment.
• Steady revenue growth: The alcohol industry has demonstrated consistent revenue growth over the years. As populations increase and consumers’ disposable incomes rise, the demand for alcohol is expected to continue growing, leading to potential revenue growth for alcohol stocks.
• Resilience during economic downturns: Even during economic downturns, alcohol stocks tend to perform relatively well. People often seek comfort or relaxation in alcohol during challenging times, making it a defensive investment option.
• Global market opportunities: Alcohol stocks provide opportunities for global investments. Many alcoholic beverage companies have a global presence and can benefit from international markets, diversifying their revenue streams and potentially increasing profitability.
• Dividend potential: Alcohol companies often have a history of paying dividends to shareholders, which can be attractive for investors seeking regular income from their investments.
• Mergers and acquisitions: The alcohol industry has seen significant mergers and acquisitions in recent years. Consolidation can create opportunities for investors, as larger companies may have increased market share and potential for growth.

Cons

Despite its stability and relative safety compared to other sectors, some risks are associated with investing in alcohol stocks.

• Regulatory changes: The alcohol industry is subject to strict regulations, and changes in laws and regulations can significantly impact the profitability and operations of alcohol companies. Possible shifts include changes in taxation, licensing requirements, advertising restrictions and age verification laws.
• Consumer preferences: Consumer preferences and trends can change rapidly, and investing in alcohol stocks carries the risk of a decline in demand for certain types of alcoholic beverages. Shifts in consumer preferences towards healthier lifestyles or alternatives to alcohol could negatively impact the profitability of alcohol companies.
• Economic downturns: Alcohol consumption is often considered discretionary spending, meaning that during economic downturns or periods of financial instability, consumers may cut back on their alcohol consumption. Lower consumption can result in decreased sales and profitability for alcohol companies.
• Legal and liability risks: The alcohol industry faces legal risks related to potential lawsuits and liability claims. Issues include drunk driving accidents, health risks associated with alcohol consumption and allegations of false advertising or misrepresentation.
• Reputation and brand risks: Alcohol companies rely heavily on their brand image and reputation. Negative publicity, such as product recalls, scandals or associations with harmful behavior, can damage a company’s brand and result in decreased sales and profitability.

How to Choose

When looking for investments in alcohol-related stocks it’s important to do your research and understand the company’s business model as well as its financial position before investing.

Here are some key things to look for when investing in alcohol stocks.

Industry Performance

Research the overall performance of the alcohol industry. Look for trends and growth patterns, as well as potential challenges or risks that could impact the industry as a whole.

Company Financials

Examine the financial health of the alcohol company you are considering investing in. Look at their revenue, profit margins and debt levels. Assess their ability to generate consistent earnings and manage their financial obligations.

Brand Strength

Evaluate the strength and reputation of the alcohol company’s brands. Consider their market share, customer loyalty and brand recognition. A strong and well-known brand can provide a competitive advantage and contribute to long-term growth.

Distribution Networks

Assess the company’s distribution networks and partnerships. Look for companies with extensive distribution channels, both domestically and internationally. A strong distribution network can help the company reach a larger customer base and increase sales.

Regulatory Environment

Understand the regulatory environment surrounding the alcohol industry. Consider potential changes in regulations or policies that could impact the company’s operations and profitability. Stay informed about licensing requirements, taxes and legal restrictions that may affect the industry.

Consumer Trends

Stay updated on consumer trends and preferences within the alcohol industry. Look for companies that are adapting to changing consumer tastes and preferences. Consider the demand for different types of alcohol, such as craft beers, spirits or non-alcoholic beverages.

Competitive Landscape

Analyze the competitive landscape within the alcohol industry. Identify the company’s main competitors and assess their market positioning. Look for companies that have a competitive advantage, such as unique products, strong distribution networks or innovative marketing strategies.

Where to Buy

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Active and Global Traders

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Active and Global Traders

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Interactive Brokers is a comprehensive trading platform that gives you access to a massive range of securities at affordable prices. You can buy assets from all around the world from the comfort of your home or office with access to over 150 global markets. Options, futures, forex and fund trading are also available, and most traders won’t pay a commission on any purchase or sale.  

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• IB SmartRouting provides significant price improvement vs. industry
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Cons

• Beginner investors might prefer a broker that offers a bit more hand-holding and educational resources

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Leveraged Trading

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Leveraged Trading

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82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Plus500 is an online CFD broker focusing on contracts for difference (CFDs). CFDs are similar to binary options in the U.S. where traders take all-or-nothing speculation on the prices of certain securities like indices, commodities or currencies. While not legal to trade in the U.S., CFDs are legal in many jurisdictions across the globe and Plus500 offers a wide array of tradable markets using these instruments. 

Plus500 doesn’t charge commission and only profits off the spread, which is the difference between the buy and sell price of a specific security. But Plus500 is not a broker for beginners — the education materials are sparse and CFDs are risky derivatives capable of sapping out all of an investor’s capital. Only trade these instruments if you understand how they operate and the risks involved with buying them.

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• Only derivatives are available
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Public is the only investing platform that lets you trade stocks, ETFs, crypto, bonds, options and alternative assets—like fine art and collectibles—all in one place. Public also provides access to custom company metrics, live shows about the markets, and insights from a community of millions of investors, creators, and analysts.

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Cons

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• At this time, only offers individual brokerage accounts and not IRAs

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Beginners

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Beginners

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Robinhood is a popular trading platform known for its commission-free trades and user-friendly mobile app. Ideal for novice investors, Robinhood makes it easy to buy and sell stocks, ETFs and cryptocurrencies. The platform offers a straightforward, no-frills experience, making it accessible for users new to investing. With features like fractional shares and a sleek interface, Robinhood lowers the barriers to entry for investing, allowing users to start with just a few dollars. It lacks the advanced tools and research options that more experienced investors might seek. Overall, Robinhood is a great choice for beginners seeking a simple way to invest.

Best For

• Beginners looking for simplicity
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Pros

• User-friendly mobile app
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Cons

• Limited research tools
• No mutual funds available
• Basic customer support options

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Active Short Sellers

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Active Short Sellers

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TradeZero is an online broker and free stock trading platform that provides everything you need to successfully share and trade, including round-the-clock customer support. TradeZero provides four different trading state-of-the-art software programs with its services, a locator for sourcing shares for shorting, commission-free trades, and real-time streaming, to name a few of the features promoted on their website. The software is a unique and (potentially) affordable option for anyone interested in stock trading.

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Pros

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• Mobile app allows users to access stocks and trade in real-time while on the go

Cons

• Enforces Pattern Day Trading restrictions (accounts need to maintain a daily equity balance of at least $25k)
• Mobile app could offer more features

Frequently Asked Questions 

The post Top Performing Alcohol Stocks by Kaitlyn Wolf appeared first on Benzinga. Visit Benzinga to get more great content like this.