Many people believe a stock market crash could be on the horizon. With this in mind, I am earmarking certain stocks I would add to my holdings if they were to cheapen due to any forthcoming crash. Britvic (LSE:BVIC) is one such stock.
Stock market crash ahead?
A geopolitical issue, which could lead to war, could cause stock markets to crash across the world. This is especially the case when world superpowers are involved. There are currently escalating tensions between Russia and Ukraine. To help avoid conflict, other countries, such as the US, have become involved to mediate a solution and avoid a war.
From a macroeconomic perspective, when world leading economies are struggling or inflation is soaring out of control, a crash could occur. The US and China, two of the world’s premier economies, are struggling with their own respective issues.
China is in the midst of a real estate crisis and has seen its growth, measured by gross domestic product (GDP), slow to levels not seen for some time.
The US is struggling with inflation issues. A rise in consumer prices to levels not seen since the 1980s is causing concern among economists. In 1982, when the Consumer Price Index (CPI) rose to levels seen recently, the stock market crashed.
It is worth noting nobody can actually accurately predict if a stock market crash will occur or not.
A stock I’d buy
Britvic is a branded soft drinks producer and a major player in the UK market. It also has a global reach with operations in Ireland, France, and Brazil. Some of its most prominent brands include J20, Robinsons, and Tango. It also has an exclusive agreement with giant PepsiCo.
As I write, Britvic shares are trading for 910p. At this time last year, the shares were trading for 785p, which is a 15% return over a 12-month period. When the 2020 stock market crash occurred, shares dipped but have recovered strongly close to pre-pandemic highs. I believe they could do something similar if another market downturn were to occur.
Britvic has an excellent track record of performance. I do understand that past performance is by no means any guarantee of the future, however. Looking back, revenues have been consistently over £1.4bn for the past four years. Levels in 2020 and 2021 were slightly lower than in 2018 and 2019 due to the effects of the pandemic.
Coming up to date, Britvic released a Q1 report released last month which was excellent, in my opinion. Total revenue increased by 16.5% compared to the same period last year. In-home revenue grew and out of home channels continued to recover towards pre pandemic levels. International markets also saw growth in sales and revenue.
Britvic shares could also make me a passive income. It currently sports a dividend yield of close to 3%. The shares look reasonably priced right now with a price-to-earnings ratio of 23. Any market crash could cheapen shares, making them more enticing. It is worth noting that a crash could also lead to cancelled dividend payments, however.
Britvic does face headwinds in the form of supply chain issues, and inflation is driving up the cost of raw materials it needs. In addition to this, competition in the drinks sector is also intense. All these factors could affect performance and investment viability.
