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In this piece, we delve into the top 10 beverage dividend stocks for immediate purchase. If you're seeking actionable insights without a deep dive into industry analysis, feel free to jump straight to our selection of the 5 Best Beverage Dividend Stocks to Buy Now.
A recent report released by the Commerce Department highlights a noteworthy surge in consumer spending last month, signaling a robust state of the economy. Despite facing heightened borrowing costs, the United States continues to outperform other nations globally, largely attributed to its resilient labor market. Matt Shay, President of the National Retail Federation (NRF), acknowledged the uncertainty surrounding the future trajectory of interest rates and inflation. However, Shay underscored the pivotal role played by a strong job market and escalating real wages in bolstering consumer spending. Analyzing individual sectors with data sourced from CNBC/NRF Retail Monitor, the food and beverage sector witnessed a 1% month-over-month increase in sales and demonstrated a 5.3% uptick compared to the corresponding period last year.
Over the years, the food and beverage industry has undergone substantial growth, marked by a transition towards sustainable practices and the integration of technology into its operations. Positioned for further expansion and development, the industry has demonstrated resilience and adaptability. According to findings from the Food and Beverages Global Market Report 2023, projections indicate a promising outlook, with the global food and beverage sector anticipated to achieve a Compound Annual Growth Rate (CAGR) of 6.3% by the year 2027.
In 2023, the spirits segment within the beverage industry maintained its dominant position in market share for the second consecutive year, surpassing beer and wine. According to the annual economic report by the Distilled Spirits Council of the US (DISCUS), US spirits revenue experienced a modest increase of 0.2%, reaching $37.7 billion. Despite this slight growth, the spirits industry outpaced both beer and wine sales by 0.4% and 26.1%, respectively. The report highlighted pre-mixed cocktails as the fastest-growing category within the spirits sector, with a notable 26.7% rise in revenue to $2.8 billion.
Chris Swonger, President and CEO of DISCUS, discussed the performance of the beverage alcohol industry with CNBC, emphasizing the resilience of the spirits sector in maintaining its leadership position within the total beverage alcohol market. Swonger also noted that the spirits market is currently undergoing a period of adjustment.
In the past year, the spotlight was firmly on the surge of tech stocks, which overshadowed performance in nearly every other industry. Despite not reaching exceptional levels, food and beverage stocks managed to yield a modest return of 2.5%, as indicated by the S&P Food & Beverage Select Industry Index. This index monitors the performance of companies across various sub-industries within food and beverage. As of April 9 this year, it has seen an increase of 3.12%.
Given the tech sector's dominant performance in recent times and investors' ongoing preference for the innovation it offers, one might expect consistent strong returns from these equities over time. While this holds true to some degree, current attention is focused on the long-term performance of Monster Beverage Corporation (NASDAQ: MNST). From 1994 to April 8, 2024, the stock has surged an astounding 185,400%, attracting headlines for its remarkable growth trajectory. Headquartered in California, the company specializes in energy drinks, alcoholic beverages, teas, and coffees.
The food and beverage industry is undergoing a noticeable shift towards sustainability, as highlighted by a Deloitte survey conducted among food and beverage executives. Results indicate that in 52% of cases, products are expected to emphasize sustainable properties, followed by organic qualities at 36%, and healthy aspects at 35%. These attributes align closely with the trend of clean labeling and the avoidance of ultra-processed food. Additionally, the survey found that three-quarters of companies are in support of front-of-package nutritional labeling initiatives.
In the beverage industry, notable players like PepsiCo, Inc. (NASDAQ: PEP), The Coca-Cola Company (NYSE: KO), and Starbucks Corporation (NASDAQ: SBUX) stand out as top stocks that also provide dividends to shareholders. In this article, we delve deeper into other beverage dividend stocks worth considering.
Our Methodology:
To identify the top beverage stocks, we conducted an analysis of Insider Monkey's database, which encompasses 933 hedge funds as of Q4 2023. Our focus was on companies primarily engaged in the production and distribution of various liquid refreshments, spanning soft drinks, alcoholic beverages, coffee, tea, bottled water, energy drinks, fruit juices, sports and nutritional drinks, and dairy-based beverages. From this pool, we curated a list of 10 dividend-paying companies, ranked in ascending order based on the number of hedge funds holding stakes in them as of Q4 2023. It's worth noting that the top 10 consensus stock picks of hedge funds have significantly outperformed the S&P 500 Index by over 140 percentage points during the past decade.
Number of Hedge Fund Holders: 21
Brown-Forman Corporation (NYSE: BF-B) is a prominent American company specializing in the production and marketing of alcoholic beverages. As of April 13, the company offers a quarterly dividend of $0.2178 per share, translating to a dividend yield of 1.76%. It stands out as one of the premier beverage stocks on our list due to its remarkable track record of regular dividend payments to shareholders spanning 80 years, coupled with an impressive 40-year streak of consistent dividend growth.
As of Q4 2023, Insider Monkey's database reveals that 21 hedge funds held stakes in Brown-Forman Corporation (NYSE: BF-B), a slight decrease from the previous quarter's 30 hedge funds. Nonetheless, the collective value of these stakes exceeds $1 billion. Leading the pack with over 11.6 million shares, Fundsmith LLP emerged as the company's top stakeholder in Q4.
Number of Hedge Fund Holders: 32
Bunge Global SA (NYSE: BG), headquartered in Missouri, is a leading agribusiness and food company that manufactures a diverse array of ingredients utilized in various beverages, including sports drinks. The company's financial position remained robust for FY23, as evidenced by its generation of nearly $2.5 billion in cash flow with adjusted funds from operations. Ending the year with over $2.6 billion in cash and cash equivalents, Bunge Global SA witnessed a notable increase from the previous quarter's $1.1 billion.
Recognized as one of the top beverage stocks, Bunge Global SA (NYSE: BG) offers a quarterly dividend of $0.662 per share. Notably, the company has consistently increased its dividends annually since 2020. As of April 13, the stock's dividend yield stands at 2.55%.
Insider Monkey's database reveals that as of the end of Q4 2023, 32 hedge funds held stakes in Bunge Global SA (NYSE: BG), marking a slight increase from the 31 funds in the previous quarter. The combined value of these stakes exceeds $210.7 million.
Number of Hedge Fund Holders: 34
Archer-Daniels-Midland Company (NYSE: ADM) earns its place among the top beverage stocks that provide dividends, specializing in agricultural commodities and food ingredients essential for both alcoholic and non-alcoholic beverages. Presently, the company offers a quarterly dividend of $0.50 per share, marking an 11.1% increase in January of this year. This hike extends the company's impressive streak of dividend growth to 51 years, affirming its commitment to shareholder returns. As of April 13, the stock boasts a dividend yield of 3.28%.
According to Insider Monkey's Q4 2023 data, 34 hedge funds maintained stakes in Archer-Daniels-Midland Company (NYSE: ADM), a slight decrease from the 37 funds in the preceding quarter. The cumulative value of these stakes amounts to nearly $820 million. Among these hedge funds, AQR Capital Management emerged as the leading stakeholder in Q4.
Notably, Horizon Kinetics LLC highlighted Archer-Daniels-Midland Company (NYSE: ADM) in its Q4 2023 investor letter. Here's what the firm had to say: [content from Horizon Kinetics LLC's Q4 2023 investor letter can be inserted here if available]
“There are the securities exchanges in our strategies, of course, which we’ve adequately covered. Also, ‘2nd tier’ varieties of asset-light businesses, like car dealerships (AutoNation and Penske Auto Group) and shipping brokers (Clarkson PLC and Braemar PLC). Less well-reviewed have been a few companies that are asset-intensive but possess particular inflation-beneficiary attributes."
"One such company is Archer-Daniels-Midland Company (NYSE:ADM), a leading agricultural commodities processor known for its vast array of products. From grains and legumes to flour, protein meals, oils, starches, and syrups, ADM plays a crucial role in bringing a wide range of food items to our dinner plates. With a comprehensive infrastructure including machinery, terminals, ships, and railroad cars, ADM operates as an intermediary in the supply chain, albeit in a low-margin business. However, its business model thrives on a constant-spread basis, earning stable margins across a substantial sales base.
As pricing for agricultural commodities rises over time, ADM benefits from a higher dollar amount percentage spread, translating into increased income. This dynamic presents the company with the opportunity to capitalize on favorable market conditions and potentially expand its margins. To delve deeper into the intricacies of ADM's business model and its positioning amidst evolving market trends, you can read the full text here."
Number of Hedge Fund Holders: 38
McCormick & Company, Incorporated (NYSE: MKC) is a prominent American food company renowned for its flavoring products utilized in a diverse array of beverages. In the first quarter of 2024, the company showcased robust financial performance, reporting an operating cash flow exceeding $138 million. This figure marks a notable increase from the $103 million recorded in the corresponding period last year. Additionally, McCormick & Company closed the quarter with over $178 million in cash and cash equivalents, reflecting an uptick from the $166 million reported in the previous quarter.
On March 27, McCormick & Company, Incorporated (NYSE: MKC) announced a quarterly dividend of $0.42 per share, consistent with its previous dividend payout. With a track record of increasing dividends for 38 consecutive years, McCormick & Company stands out as one of the premier beverage stocks offering dividends to shareholders. As of April 13, the stock boasts a dividend yield of 2.34%, underscoring its appeal to income-focused investors.
Insider Monkey's database indicates a growing interest among hedge funds in McCormick & Company, Incorporated (NYSE: MKC), with the number of funds holding stakes increasing to 38 in Q4 2023 from 33 in the previous quarter. The combined value of these stakes amounts to approximately $1.5 billion, reflecting confidence in the company's prospects among institutional investors.
Number of Hedge Fund Holders: 44
The Kraft Heinz Company (NASDAQ: KHC), headquartered in Illinois, is a multinational food and beverage corporation. Currently, the company offers a quarterly dividend of $0.40 per share, reflecting a dividend yield of 4.45% as of April 13. Regarded as one of the premier beverage dividend stocks, The Kraft Heinz Company has consistently increased its payouts annually since 2015, underlining its commitment to delivering value to shareholders.
Insider Monkey's database reveals a growing interest among hedge funds in The Kraft Heinz Company (NASDAQ: KHC), with 44 funds holding stakes as of the end of December 2023, up from 40 in the previous quarter. The combined value of these stakes exceeds $13.5 billion, indicative of strong investor confidence in the company's potential. Notably, Warren Buffett's Berkshire Hathaway emerged as the largest stakeholder in Q4, further solidifying The Kraft Heinz Company's position in the market.
Number of Hedge Fund Holders: 51
Mondelez International, Inc. (NASDAQ: MDLZ) stands as an American powerhouse in the food, beverage, and confectionery sector. As of April 13, the company offers a quarterly dividend of $0.425 per share, resulting in a dividend yield of 2.55%. Noteworthy for income-oriented investors, Mondelez International has consistently increased its dividends over the past decade, positioning itself as one of the top beverage dividend stocks.
According to Insider Monkey's database, Mondelez International, Inc. (NASDAQ: MDLZ) remained a component of 51 hedge fund portfolios in Q4, mirroring the same number as the previous quarter. The collective value of stakes held by these hedge funds surpasses $1.3 billion. Leading the pack with over 3.2 million shares, Holocene Advisors emerged as the company's top stakeholder in Q4, reflecting ongoing investor confidence in Mondelez International's potential.
Number of Hedge Fund Holders: 59
Starbucks Corporation (NASDAQ: SBUX) stands as a global powerhouse in the coffee industry, renowned for its expansive chain of coffeehouses offering a diverse array of coffee beverages. Recently, the company declared a quarterly dividend of $0.57 per share, maintaining consistency with its previous dividend payout. Notably, Starbucks has demonstrated a commendable track record of regular dividend growth for the past 13 years, solidifying its position as one of the premier beverage stocks.
As of April 13, the stock boasts an attractive dividend yield of 2.68%, appealing to income-focused investors seeking steady returns. With its strong brand presence and commitment to shareholder value, Starbucks Corporation continues to be a top choice among investors looking for stability and growth potential in the beverage sector.
According to Insider Monkey’s Q4 2023 database, 59 hedge funds maintained stakes in Starbucks Corporation (NASDAQ: SBUX), representing a slight decrease from the 60 funds in the preceding quarter. Nonetheless, the collective value of these stakes exceeded $3.6 billion, underscoring significant investor interest in the company.
Fisher Asset Management emerged as the leading stakeholder in Starbucks Corporation (NASDAQ: SBUX) during Q4. As one of the world's largest hedge funds, Fisher Asset Management's investment in Starbucks further highlights the company's appeal to institutional investors seeking opportunities in the food and beverage sector.
Number of Hedge Fund Holders: 62
The Coca-Cola Company (NYSE: KO) ranks among the top beverage stocks renowned for its consistent dividend payouts. Often referred to as Warren Buffett’s favorite company, Coca-Cola boasts an impressive track record of dividend increases for 62 consecutive years. As of April 13, the company offers a quarterly dividend of $0.485 per share, reflecting a dividend yield of 3.33%.
With its longstanding commitment to shareholder returns and a globally recognized brand, The Coca-Cola Company continues to be a preferred choice for income-oriented investors seeking stability and growth in the beverage sector.
At the close of December 2023, Insider Monkey's tracking revealed that 62 hedge funds had stakes in The Coca-Cola Company (NYSE: KO), indicating a rise from 58 in the previous quarter. Impressively, these stakes collectively amounted to nearly $27 billion in value.
The increased interest from hedge funds underscores the enduring appeal of The Coca-Cola Company among institutional investors, reaffirming its status as a stalwart in the beverage industry.
Number of Hedge Fund Holders: 63
McDonald’s Corporation (NYSE: MCD), a renowned American multinational fast-food chain, also offers a diverse range of beverages and other drinks. As of April 13, the company provides a quarterly dividend of $0.67 per share, resulting in a dividend yield of 2.50%. Notably, McDonald’s boasts an impressive dividend growth streak spanning 47 years, positioning it as one of the premier beverage dividend stocks.
With its robust dividend history and a strong presence in the fast-food and beverage sectors, McDonald’s Corporation continues to attract income-focused investors seeking steady returns and stability in their investment portfolios.
According to Insider Monkey’s database, 63 hedge funds maintained stakes in McDonald’s Corporation (NYSE: MCD) at the end of Q4 2023, representing a decrease from 70 in the previous quarter. Nonetheless, the combined value of these stakes exceeded $2.09 billion.
Ken Griffin's Citadel Investment Group emerged as the leading stakeholder in McDonald’s Corporation during Q4. Despite the slight decrease in hedge fund ownership, McDonald’s remains a compelling investment choice for institutional investors, reflecting confidence in the company’s long-term prospects within the fast-food and beverage sectors.
Number of Hedge Fund Holders: 64
PepsiCo, Inc. (NASDAQ: PEP) leads our selection of top beverage stocks offering dividends. As a multinational beverage and snack company, PepsiCo boasts an impressive track record of dividend growth spanning 52 consecutive years. Presently, the company's annual dividend stands at $5.42 per share, with a dividend yield of 3.01% as of April 13.
With its longstanding commitment to returning value to shareholders and a diversified portfolio of popular brands, PepsiCo continues to be a favored choice among investors seeking stable income and growth potential in the beverage industry.
According to Insider Monkey’s Q4 2023 database, 64 hedge funds maintained stakes in PepsiCo, Inc. (NASDAQ: PEP), showing a slight decrease from the 65 funds in the previous quarter. Nonetheless, the combined value of these stakes exceeded $4.5 billion.
Despite the marginal decrease in hedge fund ownership, PepsiCo remains an attractive investment option for institutional investors, reflecting confidence in the company’s strong market position and steady performance in the beverage and snack industry.
Source: Insider Monkey
