Portfolio Sips: Two Wine Stocks Worth Adding to Your Holdings

The holiday celebrations may be winding down, but the investment opportunities in the beverage sector are just heating up. While many investors overlook the alcoholic beverage market, wine stocks offer compelling value for those seeking stability and growth in their portfolios. We’ve identified two major players in the wine and spirits space worth your attention as we head into 2023 and beyond.

Vintage Wine Estates: The Emerging Contender

Vintage Wine Estates operates across multiple channels—traditional wholesale distribution combined with a growing direct-to-consumer online delivery model. This dual-channel approach provides resilience during economic downturns. The company’s recent quarterly results demonstrated strong performance, with both earnings and revenue surpassing analyst expectations.

Why VWE Stands Out

According to Cowen analysis, Vintage Wine Estates maintains competitive advantages even when broader market conditions soften. The company’s strategy of competitive pricing positions it to capture market share during periods of reduced consumer spending. Perhaps most telling, corporate insiders purchased approximately $266,200 in VWE shares between November and December—a significant show of confidence from those closest to the business.

Wall Street maintains a Moderate Buy stance on VWE, with price targets suggesting potential upside of around 2.52% over the coming year, with shares expected to reach $3.25 on average.

Constellation Brands: The Established Leader

With nearly eight decades of operational history, Constellation Brands commands a dominant position in the alcoholic beverage industry. The company’s premium portfolio spans Corona beer, Robert Mondavi Cabernet Sauvignon wine, SVEDKA Vodka, Casa Noble Tequila, and High West Whiskey—covering multiple price points and consumer segments.

Consistent Performance and Shareholder Returns

Constellation has now delivered four consecutive quarters of earnings and revenue beats, driven by sustained consumer demand for its premium offerings. The company’s commitment to shareholder value is evident through its dividend policy: Class A shareholders receive 80 cents quarterly while Class B holders get 72 cents, with a payout ratio of 27.91%—a healthy indicator of sustainable returns.

The beer division continues to be the growth engine, providing stability even as wine and spirits segments face headwinds. Analyst Steve Powers at Deutsche Bank expects Q3 results (released January 6, 2023) to come in above consensus expectations, buoyed by ongoing beer segment momentum.

Market Sentiment on STZ

Analyst consensus for Constellation Brands is Strong Buy, underpinned by nine Buy ratings against two Holds. The average price target stands at $276.64, implying potential appreciation of approximately 19% over the next 12 months—a significant opportunity for long-term holders.

The Broader Wine Stocks Opportunity

The wine and spirits sector shouldn’t be dismissed as niche territory. Market research indicates the global wine market was valued at $513.8 billion in 2022 with projected compound annual growth of 5.1% through 2032. Expanding beyond wine alone, the broader alcoholic beverages sector reached $1,471.7 billion in 2021 and is forecast to grow at 2.51% annually, reaching $1,795.3 billion by 2030.

While these growth rates won’t create overnight fortunes, the combination of established market maturity, consistent consumer demand, and strong cash generation makes wine stocks attractive for buy-and-hold investors seeking both income and capital appreciation.

Both Constellation Brands and Vintage Wine Estates represent quality exposure to a resilient, cash-generative sector that has demonstrated staying power across economic cycles.