3 TSX Stocks to Buy in This Super Sector

Canadians should get in the alcohol sector and buy TSX stocks like Corby Spirit and Wine Ltd. (TSX:CSW.A) and others.

| More on:

The COVID-19 pandemic has reshaped many of our habits over the past year. Alcohol consumption has increased significantly in North American and across the developed world during this crisis. This industry is geared up for solid growth over the course of the 2020s. Today, I want to look at three of the best TSX stocks to snag in this sector.

Here’s why I’m buying this beer stock in the spring

Waterloo Brewing (TSX:WBR) is engaged in the production, distribution, and sale of alcohol-based products. Its shares have climbed 7.5% in 2021 as of late-morning trading on March 26. The stock is up over 140% from the prior year. The company released its third-quarter 2020 results on December 10.

Net revenue in the year-to-date period increased 36% from the prior year to $62.2 million. EBITDA rose 38% to $11.9 million. Waterloo Brewing reported strong performances across its brands in its most recent quarter. Meanwhile, it also continued to benefit from the expansion of the grocery channel. Investors can expect to see its final batch of 2020 results in the spring.

Canadians who want exposure to Waterloo’s booming business should snag this TSX stock today. It also offers a quarterly dividend of $0.028 per share. That represents a modest 1.7% yield.

This TSX stock is a champion in the alcohol sector

Beer was once the top dog in the alcohol space in North America. However, its market share has waned, as younger generations are more inclined towards wine and spirits. Corby Spirit and Wine (TSX:CSW.A) manufactures, markets, and imports spirits and wines. Its shares have climbed 21% from the prior year at the time of this writing. I’d suggested that investors should pick up this TSX stock in January.

The company reported its second-quarter fiscal 2021 results in early February. Revenues in the year-to-date period has increased 4% from the prior year. Meanwhile, net earnings have grown 30% in the first half of FY2021 to $18.7 million.

Corby stock last possessed a favourable price-to-earnings (P/E) ratio of 15. Moreover, this TSX stock offers a quarterly dividend of $0.21 per share. This represents a solid 4.8% yield.

One more TSX stock to buy that sells alcohol and cannabis

Alcanna (TSX:CLIQ) is a player in the alcohol and cannabis space. Consumption of the latter has also jumped during the pandemic. Canada got off to a slow start with its cannabis retail rollout. However, provinces like Ontario have managed to bolster their brick-and-mortar footprint since recreational legalization in 2018. I’d recommended that investors pick up this TSX stock back in 2019.

The company is engaged in alcohol and cannabis retail. Its shares have climbed 25% in 2021 as of early afternoon trading on March 26. The stock has surged 300% from the prior year. It released its final batch of 2020 results on March 25. Same-store sales from continuing operations rose 7.6% and profit before income taxes hit $1.5 million — up from a $20.1 million loss in Q4 2019.

Shares of Alcanna still offer a solid P/E ratio of 23. Alcanna has a long way to go to achieve consistent profitability as it forges ahead in the cannabis space.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends CORBY SPIRIT AND WINE LTD CLASS A.

More on Investing

dividends can compound over time
Bank Stocks

Is National Bank of Canada Stock a Buy Now?

National Bank of Canada stock should continue to compound investors' returns post CWB acquisition

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

Cash Kings: 3 TSX Stocks That Pay Monthly

These TSX stocks pay monthly dividend and offer high yield near current market price, making them top investments for passive…

Read more »

Dividend Stocks

An 8.1% Dividend Stock Paying Cash Every Single Month

This dividend stock is a strong option not just for income in general, but also for paying out every month!

Read more »

stocks climbing green bull market
Dividend Stocks

2 TSX Stocks to Hold for Steady Gains

These TSX stocks are backed by a defensive business model and consistently deliver above-average returns for their shareholders.

Read more »

woman looks at iPhone
Retirement

How I’d Allocate $50,000 in Retirement Stocks in Today’s Market 

Here's how to invest in today’s stock market, presenting both opportunities to grow a retirement portfolio and risks of depleting…

Read more »

Investing

Can Air Canada Stock Finally Recover in 2025?

Down over 60% from all-time highs, Air Canada stock is expected to underperform in the near-term. However the TSX stock…

Read more »

space ship model takes off
Tech Stocks

1 Canadian Stock That Could Be the Best Investment This Decade

This tech stock might not seem like the most obvious buy, but trust me, it certainly should be.

Read more »

dividend growth for passive income
Dividend Stocks

5 Canadian Dividend Stocks With Years of Secure Payouts Ahead

These Canadian dividend stocks have visibility over future payouts, implying investors can rely on them for steady passive income.

Read more »