As many people celebrate Cinco de Mayo today I began thinking about some of the common items almost every Cinco de Mayo reveler partakes. Beer! Of course, beers and spirits are nothing new when it comes time to celebrate or have a party. Being that I see everything around me as a potential dividend stock it got me thinking about some dividend payers that produce these beers and spirits.
With that in mind, let’s delve into some Cinco de Mayo dividend stocks.
First off, let’s examine Anheuser-Busch InBev SA/NV (BUD). We are all familiar with their namesake product, Budweiser, but let’s give this stock our Cinco de Mayo spin. Part of BUD’s portfolio of beers is Mexico’s number one beer, Corona. In fact, Corona is the most popular Mexican beer in the world. BUD, has a rich history of dividend payments and increases, however that was put temporarily on hold as Anheuser-Busch was taken over by Belgian behemoth InBev. Since the takeover, BUD has resumed it’s dividend policy and began it’s tradition of increasing dividend payments. For now, BUD pays a nice 2.64% yield with an attractively low pay out ratio of 53.5%.
Next on the list, Molson Coors Brewing Company (TAP). As with Anheuser-Busch, we are all familiar with the Molson Coors namesake offerings but did you know that they also distribute the Corona, Coronita, Negra Modelo, and Pacifico brands of beers. Hey, between BUD and TAP you would own businesses that control some of the most popular Mexican beers in the world. But let’s talk some dividend numbers for TAP which currently yields a respectable 2.44% with a very low payout ratio of only 36.5%. Though not a company with a history of increasing dividends over time, this dividend payer certainly has room to grow.
Now let’s get into the hard stuff. Tequila! When thinking of spirits one of my favorite longtime holdings is Diageo plc (DEO). This company has a mammoth collection of top spirits in the world. Among their brands are Johnnie Walker, Crown Royal, J&B Scotch, Smirnoff, Ketel One, Cîroc, Captain Morgan, Baileys Irish Cream, Tanqueray and Guinness. That is some list! Of course, in keeping with the Cinco de Mayo theme they also own Don Julio Tequila. DEO pays a pretty nice yield of 2.58% with a payout ratio of 45.7%. Though not a traditional dividend grower, DEO has been paying dividends for decades and with such a solid portfolio of spirits it’s hard to imagine DEO’s tradition of dividend payment stopping for the foreseeable future.
Another top spirit producer is Brown-Forman Corporation (BF-B). You might know BF-B better for some of it’s spirits such as Jack Daniels, Southern Comfort and Finlandia, but BF-B also has an impressive tequila offering including, Pepe Lopez, el Jimador and Don Eduardo. Having paid a dividend for about 30 years with a current yield of 1.60% BF-B should find a home in someones dividend income portfolio though maybe not at these levels as it’s PE of 30.39 makes it a little too rich for me right now compared to DEO which is at 18.87.
Finally, let’s take a snack food approach to Cinco de Mayo with some of the more popular offerings from Pepsico, Inc. (PEP). Of course, everyone has cracked open a Pepsi before but did you know that PEP is a giant among the snack food world and in keeping with our theme of the day PEP owns Tostitos and Doritos among Emperador, Saladitas, Sabritas (one of Mexico’s largest snack company), Gamesa (Mexico’s largest manufacturer of cookies). PEP is a core holding in many portfolios around the world. And why not… it has a tradition of raising dividends for over 40 years, has a modest payout ratio of 57.8% and yields a very high 3.06%. What’s not to love?
Enjoy this Cinco de Mayo and think of which dividend companies market their products on this day and how you could take part in reaping some dividends for yourself.
Interested in any of these Cinco de Mayo theme dividend stocks for your portfolio?
Disclosure: Long DEO, PEP
6 thoughts on “Cinco de Mayo Dividend Stocks”
Don’t forget that Altria Group (MO) owns Ste Michelle wine and about a 30% stake in SabMiller. That’s my only connection to owning any beer & wine companies.
Happy Cinco de Mayo!
True… Thanks for the MO mention.
BUD is a cash flow machine! I just dislike how they are a net issuer of shares 😐 Can’t say I like my ownership stake reduced without good reason.
Nice list! Good companies there
I know what you mean about dilution. All I can say is they have a long history of “knowing what they are doing” in creating shareholder value over the long haul via capital appreciation and dividends. I used to own BUD a long time ago and was bought out when InBev took them over. It was nice to see the price I was paid for each share but at the same time I missed the dividend income too. Can’t complain though. It’s not often a stock you own gets taken over by another company and pays a premium for the shares you own.
In this case, Iove DEO’s portfolio of brand names. These are nice mix of premium names in a variety of spirits and at different price ranges. The brands also are a mix of classic names that have been around for decades and relatively new ones that are currently hot. I expect them to make several more epic purchases in the next 5 – 10 years.
Couldn’t agree more. DEO is a great dividend payer with amazing brand power. It’s one of my long term keepers.