Cheers to that
The branded soft drinks producer is one of the largest players in its respective market in the UK. It also has operations and a footprint in Ireland, France, and Brazil. Some of its best known brands include Tango, Robinsons, and J20. In addition to these popular brands, it also has a lucrative and exclusive agreement with PepsiCo. This agreement means it produces and sells brands such as Pepsi and 7UP.
As I write, shares in Britvic are trading for 983p per share. At this time last year, shares were trading for 813p per share, which equates to a 20% increase in the past 12 months. All my best stocks to buy now have seen an increase in share price over the past 12 months.
Prior to the pandemic and market crash in February 2020, shares in Britvic were trading for 940p per share. It has now surpassed that mark. The share price is on the way to reaching previous highs in September 2019 of over 1,000p per share. I believe it could reach this point in the near future.
Performance and growth
My best stocks to buy now perform consistently and Britvic is no different. In its most recent trading update for Q3 released last week, it reported strong performance. Revenue of £384.8m was an increase of 22.8% compared to the same period last year. Revenue growth was also reported across all individual business units which is encouraging in my eyes. Year-to-date revenue increased by 3.1% compared to last year’s figures too.
Britvic said the easing of restrictions in the UK led to significantly improved performance in the “out-of-home” channel. Reopening and freedom day meant there was substantial restocking by its customers, which boosted performance. There was also revenue growth in Brazil, France, and Ireland.
As well as this recent update, Britvic has been performing well historically which most of my best stocks to buy now do. I understand that past performance is not a guarantee of the future. I personally view and examine it as one facet of many when deciding to invest or not for my portfolio.
Britvic saw revenues increase steadily year-on-year for three years prior to the pandemic. In addition to the financials, it also has a rich history of acquisitions. I particularly like acquisitions as it shows growth and expansion plans with an eye on the long term.
The best stocks to buy now have risks too
There are potential pitfalls to investing in Britvic. Firstly, the rising cost of raw materials which are vital to produce its soft drinks could affect Britvic’s financials. Secondly, if a rising number of Covid-19 cases caused another set of restrictions, there would be an effect on Britvic’s order numbers and bottom line too.
Despite these potential drawbacks, I do like Britvic and would consider it for my portfolio. It has a good business model with a history of good performance and it offers a dividend too, which is always a bonus to help me make a passive income. I believe it is one of the best stocks to buy now and eagerly await its interim full-year results in November to view its progress.
Jabran Khan has no position in any shares mentioned. The Motley Fool UK has recommended Britvic. 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.