Despite historically high inflation, demand for beverages has remained steady, especially among the younger generation. According to Statista, the number of users in the beverage segment is estimated exceed one billion by 2025.
Danish beverage giant Carlsberg A/S (CABGY) CEO, Mr. Cees C. ´t Hart, said: “So far we don’t see any impact in our numbers from rising inflation.” Moreover, the Russian-Ukrainian war boosted sales of premium spirits in the United States. Additionally, global fine wine, champagne and spirits sales are expected to increase by around 6% to $155.20 billion this year.
According to Research and Markets, the global functional beverage market is expected to growing at a CAGR of 10.5% until 2027.
Given the context, it might make sense to add fundamentally healthy beverage stocks PepsiCo, Inc. (DYNAMISM), Anheuser-Busch InBev SA ADR (BUD), and Primo Water Corporation (PMRW) to your wallet now.
PepsiCo, Inc. (DYNAMISM)
PEP manufactures, markets, distributes and sells various convenience foods and beverages worldwide. It has seven segments: Frito-Lay North America; Quaker Foods North America; PepsiCo Beverages North America; Latin America; Europe; Africa, Middle East and South Asia; and Asia-Pacific, Australia and New Zealand, and China.
On August 2, 2022, PEP entered into a strategic agreement with Romanian premium spring water AQUA Carpatica, under which PEP will own a 20% stake in AQUA Carpatica. This partnership will help PEP expand its product line and customer base.
PEP net revenue was $20.23 billion for the second quarter ended June 11, 2022, up 5.2% year-over-year. His gross profit rose 4.6% year over year to $10.81 billion. Additionally, revenue from its Frito-Lay North America segment was $5.18 billion, up 13.8% year-over-year.
Analysts expect PEP’s revenue to grow 5.1% year-over-year to $83.52 billion for the current year. Its EPS is expected to rise 6.8% year-over-year to $6.69 in 2022. It has exceeded EPS estimates for the past four quarters. Over the past year, the stock has gained 14.1% to close the last trading session at $180.32.
PEP has an overall rating of B, which equates to a purchase from our POWR Rankings system. POWR ratings rate stocks on 118 different factors, each with its own weighting.
It has a B rating for feeling, stability and quality. In category A Beverages industry, it is ranked #9 out of 35 stocks. Click here to see additional POWR ratings for Momentum, Growth, and Value for PEP.
Anheuser-Busch InBev SA ADR (BUD)
Based in Leuven, Belgium, the century-old company BUD produces, distributes and sells beer, alcoholic beverages and soft drinks worldwide. It offers a portfolio of around 500 beer brands.
On July 28, 2022, Michel Doukeris, CEO, said: “The relentless execution of our strategy, the strength of our brands and the acceleration of digital transformation have allowed us to face the moment in a dynamic and continuous operating environment. .
BUD’s revenue was $14.79 billion for the second quarter of 2022, up 9.3% year-over-year. Its gross profit rose 2.3% year-over-year to $8 billion, while its normalized EBITDA was $5.10 billion, up 5.2% from one year to the next.
Street expects BUD’s revenue to grow 8% year-over-year to $58.64 billion for the current year. Its EPS is expected to grow 11% annually over the next five years. Over the past month, the stock has gained slightly to close the last trading session at $54.78.
BUD’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which equates to a buy in our proprietary rating system. It has a B rating for stability and feeling.
BUD is ranked No. 12 in the same sector. Click here to see additional POWR ratings for BUD (Growth, Dynamics, Quality, and Value).
Primo Water Corporation (PMRW)
PRMW provides direct-to-consumer water and water filtration services in North America and Europe. It serves bottled water, purified bottled water, premium spring water, sparkling and flavored water, mineral water, filtration equipment, coffee, water dispensers. self-service water and drinking water.
On July 18, 2022, Primo Water North America, the wholly owned subsidiary of PRMW, acquired Highland Mountain Water, located in Atlanta, Georgia. With this acquisition, the company aims to enhance its premium Mountain Valley® water brand and provide quality service to a broader consumer base.
PRMW net revenue was $571.40 million for the second quarter ended July 2, 2022, up 8.6% year-over-year. Its gross profit rose 11.8% year-over-year to $332.30 million. Additionally, its net cash from operating activities grew 11.9% year-over-year to $66.70 million.
PRMW’s revenue is expected to grow 5.6% year-over-year to $2.19 billion in 2022. Its EPS is expected to grow 20.8% annually over the next five years. Over the past month, the stock has gained 10.6% to close the last trading session at $14.35.
PRMW has an overall A rating, which equates to a Strong Buy in our POWR rating system. It has an A rating for growth and a B for stability and sentiment. It is ranked #6 in the same industry. We also rated PRMW for Momentum, Quality and Value. Get all the notes here.
PEP shares were trading at $180.23 per share on Wednesday afternoon, down $0.09 (-0.05%). Year-to-date, PEP has gained 5.16%, versus a -9.48% rise in the benchmark S&P 500 over the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentary. After…
Comments are closed.