2 top UK beverage stocks to invest in today

As the weather gets warmer and Covid-19 restrictions ease, I’m looking at adding these two UK beverage stocks to my portfolio.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Two-generation multi-religious family celebrating both Christmas and Hanukkah together

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Covid-19 restrictions will soon start to be lifted and my portfolio and I are beginning to feel quite thirsty. So, I’ve decided to look at what I think are the two best UK beverage stocks on the market right now. I’m not looking for the best small beverage stocks to invest in, but rather some bigger businesses that I believe are worth investing in now.

Naked Wines

I was only made aware of Naked Wines (LSE: WINE) last year when the coronavirus first struck. This forced me to resort to home drinking and to order online. The company killed both of these birds with one stone, making it a very interesting UK beverage stock for me.

The Naked Wines share price has fallen sharply from the record peaks above 800p struck in February. But now it’s rising once more and remains up 186% in the past year as of market close on 6 April, rising from 268p to 765p.

Ahead of its full-year results due on 15 April, any dip in the price could be a great buying opportunity for me. I hope this report will be a timely reminder of just how well the company has fared in the past year. Its most recent financials showed a near-80% rise in revenue (to £157.1m) for the six months to 28 September, giving it a P/E ratio of 41.5. This is thanks to strong demand from both new and repeat customers. 

The pandemic showcased just how simple and effective a service Naked Wines can provide. However, pub and restaurant reopenings around the world could damage its share price as consumers flock back to such venues so that’s a risk I have to bear in mind if I buy now. That’s especially so as the share is clearly expensive already and is priced to continue performing strongly. If it fails to meet lofty expectations, the price could fall.

Coca-Cola HBC     

When buying strong UK beverage stocks for my portfolio, I also think I need to look no further than Coca-Cola HBC (LSE: CCH). This strategic partner of the Coca-Cola Company bottles and distributes its products in 28 countries. Naturally, it took a hit in 2020 as restaurants and bars closed, and travel and events ground to a halt. Sales fell 12.7% to €6.1bn.

But a successful vaccination programme leading to reopenings across the UK is promising. I think it could be a good time for me to add this stock to my portfolio. I’m looking forward to actually drinking outside of my flat for the first time in months and other consumers are likely to be feeling that way too. “We expect to see a strong FX-neutral revenue recovery in 2021,” the company said recently. And analysts expect revenue growth of 8.3% and 6.7% for FY21 and FY22, respectively.

Coca-Cola HBC is currently priced at 2,360p, up 21% in the past year from a price of 1952p, and giving it a P/E ratio of 24. 

This ‘reopening’ stock isn’t without significant risks though, especially considering the rapidly growing infection rates in Europe and other countries. This could throw a spanner in the works of any plan to get the world back to normal. As with Naked Wines, it’s also expensive. But I hope that its current upward trajectory will continue, especially as this UK beverage stock is still around 20% off of its all-time highs.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

The Motley Fool UK owns shares of Naked Wines. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Passive income text with pin graph chart on business table
Investing Articles

Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »

Investing Articles

1 of the best UK shares to consider buying in April

Higher gold prices and a falling share price have put this FTSE 250 stock on Stephen Wright's list of UK…

Read more »