Constellation Brands remains one of the best ways to invest in cannabis…
Constellation owns a 38% stake in Canopy, so it has skin in the game and exposure to the cannabis market.
But outside of its stake in CGC, it’s also the maker of Corona and owns whiskey, vodka, and tequila brands. That just gives it another revenue source and a defensive moat.
However, Constellation is already looking ahead to the future, and it has sold off some of its wine brands that retail for under $11 so that management can focus on selling more lucrative adult beverages.
Overall, I believe that this is a stock you can retire on.
As you can see from the chart to the right, the stock price took a bit of a dip in January, but it’s been rebounding ever since.
And while newer investors like to focus on the share price and say it’s expensive, that doesn’t matter. Focus on accumulating shares of a quality company, and it will add up over time.
Especially considering that Constellation offers something that other cannabis companies can’t right now…
This Is What Makes Constellation Brands a Winner
Overall, STZ is a stock to buy more and more of when your wealth increases. When you see the stock price dip, it’s great to build an even bigger position.
And what Constellation offers that other cannabis companies don’t – outside of Innovative Industrial Properties Inc. (NYSE: IIPR) – is a dividend.
Dividends are great because they are versatile and can help investors during turbulent markets.
For example, you can use the dividend to supplement your income. That’s going to be money put into your trading account that you can cash out or use to buy more cannabis stocks. Constellation is currently paying out $3 per share, which is a yield of 1.55%.
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If your trading service offers it – and most of them do – you can also put those dividends into a Dividend Reinvestment Program (DRIP).
With a DRIP, your dividends will automatically be used to buy more shares of the company, and you won’t have to pay a dime for them.
A Cannabis Aristocrat
Looking ahead, Constellation is playing the long game to become a “Dividend Aristocrat,” which is a company that must have a minimum of one dividend increase annually for at least 25 years.
Being on that list carries a lot of weight with risk-averse investors.
For instance, the Retirement System of Alabama has a total of $39 million worth of Constellation shares, and it even increased its position by 201,827 shares recently. When you have this kind of backing, it helps bring a lot more stability to stocks.
Again, this is a stock you are going to want in your portfolio forever.
Executive Director, National Institute for Cannabis Investors
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9 responses to “Constellation Brands Is Still a Company to Own Forever”
August 16 2019