Thursday, July 12, 2012

Two Thirds of People Drink Booze to Relax

According to surveys done by ICM Research, approximately two-thirds of people drink alcoholic beverages during the evening in order to relax. The primary reasons given were work problems and stress. The company also found that one-third of workers have a drink or two before they go home. The organization Drinkaware has pointed out the risks of over-drinking, and may even lead to more stress down the road.

In terms of alcohol purchases, it turns out that 71% of grocery purchasers include alcoholic beverages on their grocery lists. Investors are taking a look at liquor companies as a semi-recession proof business. According to, there are over a dozen wine and liquor stocks, and additional dozen beer stocks. Eight of these stocks pay dividends.

Brown-Forman Corporation (BF-A) (BF-B) is one of the major marketers of whiskey, tequilas, liqueur, and wine. You are probably familiar with some of the major brands of the company, including Jack Daniel's, Southern Comfort, Finlandia Vodka, Woodford Reserve Bourbon, Canadian Mist, Early Times, and Korbel champagne.The stck trades at 26 times earnings and pays a yield of 1.6%. Unfortunately, earnings for the latest quarter were down about 37%, on relatively flat earnings.

Diageo (DEO) is a much larger company in the liquor business, with a market capitalization of almost $65 billion. The company's brands include the world leaders in their category, such as José Cuervo, the world's best-selling tequila, Smirnoff, the top selling vodka, and Johnnie Walker, the most popular Scotch whiskey. The stock has a forward price to earnings of 16 and a yield of 2.0%. Earnings for the quarter ending December 31 were down 20%.

The world's largest wine company is Constellation Brands (STZ). Brands include Robert Mondavi, Hardys, Clos du Bois, Franciscan Estates, Ravenswood, and Blackstone in the wine category. Beer brands include Corona, Modelo Especial and Negra Modelo, Pacífico, St. Pauli Girl and Tsingtao, along with Svedka Vodka and Black Velvet Canadian Whisky. The stock trades at ten times earnings, and does not pay a dividend.

For a free list of wine and liquor stocks, which can be downloaded, sorted, and updated, go to

Disclosure: Author did not own any of the above at the time the article was written.


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