Identifying the best stocks to buy is not an easy task. Despite that, I believe Britvic (LSE: BVIC) could tick all the boxes for my holdings.
Soft drinks
Britvic is one of the largest producers of soft drinks in the UK. Some of its best known brands include Tango, Robinsons, J20, and others. It also has a lucrative agreement with PepsiCo to bottle and distribute its products too.
So what’s happening with Britvic shares currently? As I write, they are trading for 847p. At this time last year, they were trading for 856p, which is a 1% decline over a 12-month period.
My best stocks to buy check list
So how do I evaluate my best stock picks? Let me break it down in relation to Britvic.
- Market position and profile — Britvic ticks this box for me. It is a worldwide company with operations and sales throughout the world, from mainland Europe all the way to South America. Many of its drinks are extremely popular in the market too. Both of these aspects allow it to be a big player in the market, which could continue to translate into earnings growth and investor returns.
- Performance track record — I do understand that past performance is not a guarantee of the future, but to paraphrase Warren Buffett, looking back can give you an idea of the future. I can see Britvic has grown profit for the past three years and revenue for the past two years.
- Valuation — I would love to be able to pick the best stocks to buy that are presently trading at dirt-cheap levels with the potential to see the share price grow exponentially. In Britvic’s case, I’m willing to pay a fair price for a great business. At present, the shares trade on a price-to-earnings ratio of 14.
- Passive income — dividends would boost my passive income. Britvic’s current dividend yield stands at 3.5% currently. This is higher than the FTSE 250 average. However, I do understand that dividends are never guaranteed.
Risks to note and my verdict
Despite my belief that Britvic is one of the best stocks to buy now for my holdings, there are some issues that could hinder its progress. Firstly, due to soaring inflation globally, many are struggling with the cost of living. This is potentially bad news for Britvic as some of its products are viewed as branded luxury products. Consumers may turn to supermarket essential ranges and non-branded cheaper alternatives to lighten the load on their wallet. This could impact earnings and investor returns.
Although Britvic is a global company, some of its operating territories bring with it their own issues. For example, Brazil provides real operating challenges. This is because mixed weather conditions can impact crop supplies and production issues. This can impact sales volumes, performance, and potentially shareholder returns too.
To conclude, I would be willing to buy Britvic shares when I have the spare cash to do so. Using my personal guide to identify the best stocks to buy, I believe Britvic meets all my criteria. I’m not worried about current macroeconomic challenges, which I view as short-term issues, as all my investments are long-term. I only buy shares I’m willing to hold for a long period, for example at least five to ten years.
