The closing of dine-in restaurants and pubs caused a stir in the beer industry in 2020. Breweries around the country slowed or even stopped production when these establishments were forced to adapt to a new business model of curbside pick-ups.
Professional sports shutting down also stalled beer sales temporarily, but investors still found comfort by tapping the industry’s dividend drip.
If you’re looking for beer stocks that pay dividends, look no further. We scoured the globe for to find the brightest stars of the industry with solid track records of rewarding investors.
Each steered a different path through the pandemic to recovery, and alcohol is an industry that continues running in bull markets, recessions, and even Great Depressions.
Diageo Owns Global Brands & Pays Nice Dividend
Diageo (NYSE:DEO) is a British beverage company and the biggest Scotch whisky company in the world. It’s listed on both the London and New York Stock Exchange and manages a wide portfolio of beers, liqueurs, and liquors.
Brands under the Diageo umbrella includes Guinness, Harp Lager, Tanqueray, Smirnoff, Captain Morgan, Bailey’s, Johnny Walker, and Crown Royal. Although its portfolio is wide, most of its revenue comes from these popular global brands.
DEO stock pays a 2.77 percent annual dividend in two semi-annual installments. And it kept these payments up, despite experiencing a dismal 2020 fiscal year.
The company is known for its diversity and inclusiveness, and it has a global distribution and marketing footprint. It’s a strong competitor in the global spirits market, and it can charge premium prices for some of its high-end Scotches aged 20+ years.
It’s also working on non-alcoholic mocktails like Seedlip, which it acquired in 2019, that appeal to more health-conscious consumers.
Diageo’s fiscal year 2021 is looking much brighter, with the U.S. market (which represents 40 percent of net sales) leading a resurgence in consumer demand. It surely benefited from rising sales in brands like Johnny Walker Blue.
Anheuser Busch Inbev NV Dividend Is Modest
Anheuser-Busch Inbev (NYSE:BUD) was already on the decline in the back half of the 2010s. This meant the Belgium-based brewing giant took a little longer to reach a milder recovery than some of its industry counterparts.
BUD stock offers a 1.21 percent annual dividend yield and mostly kept up its semi-annual payments through the rocky times in the late 2010s. It’s a much smaller dividend than it paid in the past decade though, leaving some investors wondering if it’s ready to bubble up.
The company is the result of a series of mergers and acquisitions that left it with a portfolio of brands that include Budweiser, Stella Artois, Four Peaks, Michelob, Rolling Rock, and more. It’s the Coca-Cola (KO) of grocery and liquor store beer aisles and has a large distribution network.
That network was the focus of regulation against anti-competitive practices from the US Justice Department and SEC. These fines weighed the company’s stock prices down through the market crash of 2020.
Still, it has two big things going for it in the 2020s: it owns Corona beer and Budweiser/Bud Light. The former got free marketing last year and the other is one of the most prominent brands associated with the Super Bowl.
It beat analyst estimates in recent quarters, reporting $0.46 and $0.79 earnings per share (EPS) in the second and third quarters of its fiscal year. If it continues this growth without breaking the law, it could give investors a big return over the next decade.
Ambev Dividend Is Frothy
Ambev ADR (NYSE:ABEV) took one of the biggest hits from the collapse in outdoor dining and drinking, dropping to a low of $1.90 per share and failing to reach formerly high trading prices. The Brazilian brewery is a subsidiary of Anheuser-Busch Inbev and is more popular in South and Central America.
On top of beers like Brahma, Skol, and Stella Artois, the company also makes carbonated soft drinks, bottled water, energy drinks, and more.
It’s a regional distributor for PepsiCo products in Brazil and Latin America markets. Ambev also holds controlling interests in Cerveza Quilmes and Cerveceria Nacional Dominicana.
ABEV has an annual dividend yield of 4.42 percent, with a $0.07 dividend scheduled to pay on February 8, 2021. It mostly maintained its semi-annual dividend payments through the pandemic, although they were squeezed into the end of the year, with payments hitting December, January, and February.
This makes it one of the cheapest and best-paying dividends from the holiday season.
Constellation Brands Has Exposure To Cannabis Too
Constellation Brands, Inc. (NYSE:STZ) is a Fortune 500 company and S&P component with the third-largest market share in beer. It’s also involved in emerging medical and recreational cannabis, along with wine and spirits.
The company’s brands include Robert Mondavi, Corona, Modelo, Pacifico, and Svedka vodka. It acts as a distributor and marketer for any brands it doesn’t directly produce.
It owns a large stake in Canopy Growth Corporation (WEED.TO), a Canadian cannabis company. This made it the first alcohol company to invest in the industry and sets it up to pivot with consumer tastes.
STZ stock paid a consistent quarterly dividend of $0.75 through the coronavirus pandemic. This gives it a $3.00 annual dividend for a yield of 1.32 percent.
Molson Coors Brewing Dividend In Doubt
Molson Coors (NYSE:TAP) faced a bear market through the 2010s as it paid off debts from a trail of acquisitions. It’s a component of the S&P 500 and trades on both the New York and Canadian Stock Exchange.
Its brand portfolio includes beers like Blue Moon, Mickey’s, Red Dog, Peroni, and Sparks. Unlike other companies listed above, it’s focused entirely on beer breweries. This leaves it largely exposed and made recovery difficult in 2020. It also suspended dividends during the worst of the economic turmoil.
Normally, it pays a 4.34 percent annual dividend yield when it does pay. Its last quarterly payment was $0.57 in March 2020, and if that returns, it could make this a sleeping giant for dividend investors.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.