Investors love dividend stocks, especially high-yield varieties, because they offer a significant income stream and have substantial total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. Let’s take a closer look at the concept of total return. Imagine you purchase a stock at $20 that offers a 3% dividend. If the stock price rises to $22 within a year, your total return is 13%. This is calculated by adding the 10% increase in stock price to the 3% dividend.
Quick Read
- Beer stocks have been hit as consumption has dropped among Gen Z and some Millenials.
- A falling stock price means rising dividends for patient growth and income investors.
- Despite falling consumption in some demographics, there will always be a demand for alcohol, as history has shown us.
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While researching our database of dividend stocks, we were surprised to find that two of the world’s largest beer and liquor companies were also paying dividends at rates exceeding 4%. Warren Buffett’s Berkshire Hathaway holds both stocks, and both offer some of the best entry points in years. We decided to screen the rest of our high-yield dividend stock database, looking for other companies that sell alcohol, and found three more that also pay outstanding dividends, with one as high as 7.65%.
Why do we cover high-yield dividend stocks?
High-yield dividend stocks offer investors a reliable source of passive income. Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.
Ambev
Unknown to most investors, this South American company pays a substantial 7.27% dividend. Ambev S.A. (NYSE: ABEV) was previously Inbev Participacoes Societarias, a Brazil-based company operating in the brewing sector. The Company produces, distributes, and sells beer, carbonated soft drinks (CSDs), and other non-alcoholic and non-carbonated (NANC) beverages across the Americas.
Ambev’s activities are divided into three segments:
- Latin America North, including the sale of beer, CSD, and NANC drinks in Brazil, as well as operations in the Dominican Republic, Saint Vincent, Antigua, Dominica, Cuba, Guatemala, El Salvador, Honduras, Nicaragua, Barbados, and Panama.
- Latin America South distributes products in Argentina, Bolivia, Paraguay, Uruguay, and Chile, and Canada, represented by Labatt’s operations, which comprise sales in Canada and some exports to the U.S. market.
The company markets products under various brand names, such as Adriatica, Brahma, Leffe, Budweiser, Corona, PepsiCo, and Lipton. It is a subsidiary of Interbrew International.
Brown-Forman
Brown-Forman Corp. (NYSE: BF-B) is an American family-owned company, one of the largest in the spirits and wine industry. This stock has been hammered this year, but it pays a solid 3.36% dividend, selling products that are in high demand and never go out of style. Brown-Forman manufactures, distills, bottles, imports, exports, markets, and sells a variety of alcoholic beverages.
Brown-Forman provides:
- Wines
- Whiskey spirits
- Whiskey-based flavored liqueurs
- Ready-to-drink cocktails
- Ready-to-pour products
- Vodkas
- Tequilas
- Gin
- Brandy
- Rum
- Bourbons
- Liqueurs
The company offers its products primarily under these famous brands:
- Jack Daniel’s
- Woodford Reserve
- Old Forester
- Coopers’ Craft
- Gentleman Jack
- Herradura
- el Jimador
- Korbel
- Sonoma-Cutrer
- Finlandia
- Chambord
- Gin Mare
- Diplomático
- Fords Gin
- The Glendronach
- Benriach
- Glenglassaugh
- Slane
The company is also involved in the sale of used barrels, bulk whiskey, and wine, as well as contract bottling services. It serves retail customers and consumers through distributors, as well as directly to state governments, retailers, wholesalers, and provincial governments.
It has operations in the United States, Germany, Australia, the United Kingdom, Spain, Canada, France, Mexico, Poland, Brazil, Japan, and internationally.
Constellation Brands
This is the largest beer import company in the United States, measured by sales, and has the third-largest market share among all major beer suppliers, paying a solid 3.15% dividend. If there is any company whose products remain in style, it is Constellation Brands Inc. (NYSE: STZ), which achieves only 7% of its sales outside of the United States. Together with its subsidiaries, it produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy.
The company provides beer primarily under these popular brands:
- Corona Extra
- Corona Premier
- Corona Familiar
- Corona Light
- Corona Refresca
- Corona Hard Seltzer
- Modelo Especial
- Modelo Negra
- Modelo Chelada
- Victoria
- Vicky Chamoy
- Pacifico
It also offers wine under:
- Cook’s California Champagne
- Kim Crawford
- Meiomi
- Mount Veeder
- Ruffino
- SIMI
- My Favorite Neighbor
- Robert Mondavi Winery
- Schrader
- The Prisoner Wine Company
Spirits are sold under the Casa Noble, Copper & Kings, High West, Mi CAMPO, and Nelson’s Green Brier brands.
Diageo
This British multinational alcoholic beverage company is headquartered in London. The company is one of the world’s largest producers of alcoholic beverages, and it pays a dividend of 4.56%. Diageo PLC (NYSE: DEO) produces, markets, and sells alcoholic beverages worldwide.
It offers:
- Scotch whiskey, gin, vodka, rum, beer, and spirits
- Irish cream liqueurs
- Wine, Raki, tequila, Canadian, and American whiskey
- Cachaça, and brandy, as well as adult beverages and ready-to-drink products
The company’s premium brands comprise Johnnie Walker, Smirnoff, Captain Morgan, Baileys, Tanqueray, and Guinness. Its reserve brands include:
- Johnnie Walker Blue Label
- Johnnie Walker Green Label
- Johnnie Walker Gold Label 18-year-old
- Johnnie Walker Gold Label Reserve
- Johnnie Walker Platinum Label 18-year-old
- John Walker & Sons Collection
- Johnnie Walker The Gold Route
- Johnnie Walker The Royal Route
Johnnie Walker super premium brands: The Singleton, Cardhu, Talisker, Lagavulin, and other malt brands.
Molson Coors Brewing
This iconic American beer company was formed in 2005 through the merger of Molson of Canada and Coors of the United States. It remains based in Chicago, with its main offices in Golden, Colorado, and Montreal, and pays a solid dividend of 4.20%. Molson Coors Brewing Co. (NYSE: TAP) manufactures, markets, and sells beer and other malt beverage products under various brands in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.
The company offers a range of flavored malt beverages, including hard seltzers, craft spirits, energy drinks, and ready-to-drink beverages.
It provides its products under these brands:
- Aspall Cider
- Blue Moon
- Coors Original
- Five Trail
- Hop Valley
- Leinenkugel’s
- Madri
Miller Genuine Draft - Molson Ultra
- Sharp’s
- Staropramen
- Vizzy Hard Seltzer
Premium brands include Bergenbier, Borsodi, Carling, Coors Banquet, Coors Light, Jelen, Kamenitza, Miller Lite, Molson Canadian, Niksicko, and Ozujsko.
The company also markets these economy brands:
- Branik
- Icehouse
- Keystone
Miller High Life - Milwaukee’s Best
- Steel Reserve
The company’s strategic response to Bud Light’s marketing missteps a few years ago, which led to a surge in new customers, is a testament to its agility and adaptability. Furthermore, the company is exploring new opportunities, such as the potential to market a cannabis-infused product.
Warren Buffett’s Cash Up to $382 Billion: Two Dividend Stocks He Never Sells
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