With Millennials drinking less alcohol and some big corporations starting to phase out drinking in their business cultures, “sober curious” investing could take off in the coming years. While it’s unlikely that alcoholic beverages and tobacco stocks will be seriously impinged anytime soon, placing a side bet on a growing health trend could prove a lucrative play.
But how does an investor choose areas that run counter to sin stocks? The following three companies may provide the key, as they produce exactly the kinds of healthy beverages and other goods that could prove popular among a rising generation of sober consumers.
Lassonde Industries (TSX:LAS.A)
This top tier food and beverage stock makes and markets a wide range of ready-to-drink fruit and vegetable juices and drinks in Canada, the U.S. and around the world. It envisions a stronger 2019 overall than last year, with a canny marketing strategy spanning both North American countries. This includes a new pricing policy in the U.S., which has been a particularly tough economic environment of late.
Though year-on-year industry volumes for U.S. and Canadian fruit juice and drinks markets had dipped slightly at the time of its most recent quarterly report, Lassonde Industries nevertheless saw an increase of 12.8% in sales. The company paid back $12.6 million to shareholders, with a dividend currently yielding 1.57%. Its reach across Canada and the U.S., plus an innovative company ethic, make for a strong income portfolio contender.
The global leader in soft drinks, Coca-Cola covers a range of beverages from Poweraid to Dasani water as well as other drinks such as detoxifying teas, a range of coffees, as well as nectars and juices. While a NYSE-traded company may seem a little out of place in a list of Canadian beverage stocks, the majority of Lassonde Industries’ revenue is actually generated in the U.S., meaning that a generally American origin of dividend coverage in this sector.
Coca-Cola’s dividend yield is higher than that Lassonde Industries at 3.06% at the time of writing, with payments over three years expected to be well covered by income. There’s a solid track record for Coca-Cola’s payments, too, which have a good ten-year stability behind them, and steady growth over that period. With a positive remainder of the fiscal year expected, this is an income stock to put your weight behind.
Monster Beverage (NASDAQ:MNST)
Strong first-quarter results saw the energy drink producer’s stock soar last month. Beating both earnings and revenue expectations, Monster Beverage is the last on today’s list of zero-alcohol beverage stocks. With an emphasis on sports and energy drinks, Monster Beverages is almost the perfect stock for an investor looking for exposure to a potential “sober curious” industry.
It’s not a dividend payer, however, and there’s the rub. The crown has to pass to Lassonde Industries, therefore, with its diverse range of fruit and vegetable juices, plus that tasty dividend yield. Whether Monster Beverage will end up paying a dividend is not beyond the realms of possibility, and should sober living become a mainstream lifestyle trend, the option could be on the table.
The bottom line
Lassonde Industries is an excellent consumer staples’ stock that could provide safety during a market downturn. It’s also well placed to cash in on a major trend toward healthy living, and as such, its market share and stable dividend make it a solid buy right now.
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Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. The Motley Fool owns shares of Monster Beverage.