Although rising COVID-19 cases are reducing the patronage of bars and restaurants, online operations should enable brewing companies to capitalize on growing demand for beer. Furthermore, because consumer staples are regarded as safe investment bets in times of uncertainty owing to their stable demand—and yes, beer is a staple—both ABEV and TAP should benefit from rising investor interest. But which of these stocks is a better buy now? Let’s find out.Ambev S.A. (ABEV) in São Paulo, Brazil, and Molson Coors Beverage Company (NYSE:TAP) in Denver, Colo., are two popular brewers. ABEV is a Brazilian brewing company that produces, distributes, and sells beer, draft beer, carbonated soft drinks (CSD), other non-alcoholic beverages, malt, and food products in the Americas. It has exclusive bottler and distributor rights for PepsiCo, Inc.’s (NASDAQ:PEP) CSD products in Brazil. Molson Coors Beverage Company (TAP) manufactures, markets, and sells beer and other malt beverage products worldwide.
To meet current demand, most brewing companies shifted their operations online during the early months of the COVID-19 pandemic. Because the resurgence of COVID-19 cases has lately been reducing patronage of bars and restaurants, the introduction of new flavors and online operations should help beer companies stay afloat. In addition, as a consumer staple, the industry might attract investors’ attention amid these uncertain times. The global beer market is expected to grow at a 2.6% CAGR between 2020 - 2027. Therefore, we think both ABEV and TAP should benefit.
While TAP has gained 7.6% returns year to date, ABEV share price has surged 13.5%. In terms of the past year’s performance, ABEV is a clear winner with 36.3% gains versus TAP’s 28.6%. But, which of these stocks is a better pick now? Let’s find out.