Grilling Up Profits
It’s Memorial Day weekend again, a time when we honor the more than 42 million men and women who have served in uniform during times of war over the more than two centuries we’ve been a nation. We especially honor the more than 1.2 million who have given their lives in defense of our country since our nation’s founding.
Despite that sober reverence, with three days off Memorial Day tends to turn into a long, boozy weekend of barbeques and parades. More than 7 billion hotdogs will be eaten – an average of 818 every second – while the beer and liquor will flow based on spikes in alcohol sales. In fact, the Memorial Day is the sixth biggest holiday for beer, wine and liquor sales in the U.S., giving a boost to booze makers and purveyors bottom lines.
Over at Global Income Edge, we have all of your grilling and drinking needs covered on this most American of holidays.
Bottom’s Up
In our Conservative Portfolio you’ll find Diageo PLC, maker of some of the most popular premium spirits and beers. If you’re a fan of scotch, it makes Johnnie Walker, or there’s Capitan Morgan if you prefer rum. Aside from that, it make Grown Royal Canadian whiskey and Smirnoff vodka. On the beer side, you’re probably familiar with Guinness stout.
Diageo (NYSE: DEO) has a dedicated sales force of nearly 3,000 here in the U.S., helping to make its brands some of the most popular here in the States. It also makes North America extremely profitable for the company, though it is a very global player. Revenue at the company actually fell by more than 10% in its last fiscal while earnings were off by 9.5% thanks to the weakened Chinese economy, another major market for the company.
That dip shouldn’t be a major concern for investors, though. Rather, it’s an opportunity to pick up shares of the world’s leading spirits brand on the cheap. Diageo holds about 27% of global market share based on volume, selling more than 165 million equivalent units of spirits in its last fiscal year. Its next closest competitor sold only 98 million units.
In addition to its sizable sales staff which drives organic volume growth, Diageo also has a history of growth through acquisition. Despite being the dominant player, the global spirits industry is highly fragmented, with many companies making top regional sellers. With about $1 billion in cash on hand and easy access to the credit market, Diageo is always on the lookout for a good acquisition target.
Bottoms up to Diageo and its 3% yield!
Fishy Profits
If you’re one of the millions of Americans opting for healthier fare at your cookouts, or just want to do something different, in our Aggressive Portfolio you’ll find Marine Harvest.
The Norwegian company is one of the leading providers of sustainably farmed salmon in the world and expects to produce 440,000 tons of the fish this year alone. That’s about a fifth of global salmon consumption, which has been skyrocketing thanks to increasingly health conscious consumers. At the same time, fish such as salmon has become increasingly inexpensive thanks to modern fish farming techniques which are able to produce more fish while not depleting wild stocks.
In the fourth quarter, Marine Harvest (NYSE: MHG) reported that operational revenue rose 1.8% to a record high $900 million, while earnings totaled $135.4 million for the quarter. Its results were so good, the company declared a special dividend of $0.16, bringing its yield up to better than 10% for the trailing year.
Despite economic problems in China and Europe, the company has said it expects demand from those two regions to continue growing this year. That’s good news since Europe makes up nearly three-quarters of the company’s revenue. To help meet that growing demand, the company recently purchased assets from Acuinova Chile, boosting Marine Harvest’s production capacity by 40,000 tons of salmon annually.
With production expanding to meet growing demand, those salmon are like pink ocean gold!
There’s Still More
Those are just two stocks from Global Income Edge’s portfolios, where you’ll find many companies which yield 6%, 8% and even more than 10%. Perhaps best of all, thanks to the investment system developed by Chief Strategist Richard Stavros, the yields are growing even as the stocks are less volatile than the broader market. Click here to see what else Richard has on offer.