Should You Invest in The Boston Beer Company?

PHOTO CREDIT: The Boston Beer Company

OVERVIEW

The Boston Beer Company Incorporation designs and manufactures alcoholic products in the United States. Their products are sold both domestically and internationally. They sell beer as well as hard seltzer based products.

Why You Should?

1. The Boston Beer Company has seen strong growth despite the COVID-19 pandemic. This comes to show that customers are still consuming its products through these tough times. This has positively benefited the company’s top and bottom line and has attracted investor attention to the company.

2. Because the company posted strong earnings, it also shows that they are less affected during the pandemic, unlike their smaller competitors who will most likely go under due to low demand.

3. The company was seeing rising demand before the pandemic as shown as revenue and profit in their full-year records. The company reported revenues of 1.25 billion and profits of 110 million. Both of these metrics are up from the last fiscal year when the company reported revenues of 995.6 million and profits of around 92.7 million.

PHOTO CREDIT: Yahoo FInance

Why You Should Not?

1. Trade tensions will negatively impact the company as it causes uncertainty on commodity prices. Grain and other material is a key ingredient used by the company. If the Boston Beer Company can not predict these prices, they risk increasing prices or losing profits.

2. The Boston Beer Company has strong competition from other beer giants as well as other beverage manufacturers like Pepsi and Coca-Cola. This might hurt the company’s future growth.

3. The company’s stock is trading at over $800. This price is way too high and I would recommend investing in other beverage company’s or in other industries together.

4. Though the company has seen a rise in sales, they have seen a decrease in commercial sales. The products that were intended to be sold to restaurants and other large venues now can not be due to the COVID-19 pandemic and government regulations.

MY OPINION

In my opinion, I think that The Boston Beer Company is a great long term investment due to its strong growth because of a diverse product selection. However, an expensive stock price and ongoing trade tensions might keep investments away from the company in the short term.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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