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

Investing Articles

The tax-free route to millionaire portfolios

• Although annual ISA subscriptions are capped, ISAs are an undoubtedly serious wealth-building tool: you can build serious wealth.

Read more »

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

Will FTSE 100 shares soar 35% after the general election?

Royston Wild explains why FTSE 100 shares might be about to soar, and discusses a top penny stock that could…

Read more »

Asian man looking concerned while studying paperwork at his desk in an office
Investing Articles

After gaining 34% in a month, is the Nvidia share price now uninvestable?

Our author says the Nvidia share price is very high at the moment. He's cautious when considering investing in the…

Read more »

Businessman use electronic pen writing rising colorful graph from 2023 to 2024 year of business planning and stock investment growth concept.
Investing Articles

This under-the-radar FTSE 100 share has hiked dividends 13.7% a year for a decade. Time to buy?

Harvey Jones is kicking himself for missing out on this FTSE 100 share that's kept investors happy with long-term share…

Read more »

British union jack flag and Parliament house at city of Westminster in the background
Investing Articles

Labour winning the general election would be positive for UK stocks, says JP Morgan

One mega-bank thinks certain UK stocks could benefit following the 4 July election. This writer considers a FTSE share that…

Read more »

Older couple walking in park
Investing Articles

No savings at 40? Here’s how I’d aim to retire comfortably with FTSE 100 stocks

It's never too late to begin investing in FTSE 100 stocks for retirement. Royston Wild reveals three steps to help…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

Down 17%, is National Grid’s share price a FTSE 100 bargain?

National Grid's share price has taken a battering following a multi-billion-pound rights issue and dividend rebasement. Is it now too…

Read more »

Environmental technology concept
Investing Articles

Up 150% this year! Can NVIDIA stock keep on soaring?

Christopher Ruane explains why NVIDIA stock has soared over 150% already this year, where it might be going -- and…

Read more »