Constellation Brands Stock Looking to Finish 2020 Strong

Checking in on the Constellation Brands stock fundamentals

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Constellation Brands, Inc. (NYSE:STZ) is the producer and marketer of many well-known beer, spirits and wine brands. The company’s portfolio also owns 38.6% of Canopy Growth (CGC), in an effort to carve out its own slice of the cannabis industry.

STZ scored an annual high of $218.90 just yesterday, and is now up 15% in 2020. The shares have nearly doubled off their March 23 five-year lows of $104.28, and this most recent stretch of higher highs has support in place at their 30-day moving average. A word of warning though; STZ's 14-day Relative Strength Index (RSI) of 68 sits on the cusp of "overbought" territory -- which means a short-term breather may be imminent.

Whatever the direction, now could be an opportune time to take advantage of the security's next move with options. The stock's Schaeffer's Volatility Index (SVI) of 33% sits in the particularly low 17th percentile of its annual range. This means CSCO currently sports attractively premiums.

STZ Stock Chart

Constellation Brands stock has a forward dividend of $3.00 and a forward dividend yield of 1.40%. STZ last paid a dividend of $0.75 in the third quarter of 2020. Constellation Brands stock has paid investor dividends since 2015.

Constellation Brands stock currently sports an inflated price-earnings ratio of 38.56. However, the company’s forward price-earnings ratio is much more promising at 19.80. Constellation Brands also has $204.6 million in cash, which pales in comparison to the $11.6 billion the company has in debt.

From a fundamental point of view, the most intriguing part about investing in Constellations Brands stock lies in its revenue production history. The company has done well in 2020, maintaining its annual revenue at a comparable level to the previous year. Prior to 2020, STZ had demonstrated consistent growth, adding about $1 billion in sales since 2017. On the bottom line, the company has struggled to maintain the same level of profits from previous years. Over the past 12 months, STZ has produced just $55.7 million in net profit, which represents a small fraction of the $3.4 billion it ended its fiscal year with in 2019. Nonetheless, the company more than doubled its net income between 2017 and 2019.

The biggest red mark for STZ is $11.8 million in net losses the company ended its most recent fiscal year with. Overall, Constellation Brands stock will likely be a winner in the long run, taking the company’s revenue and net income growth over the past few years into account.


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