Alcohol giant Constellation Brands faces challenges like tariffs and declining alcohol demand from Gen Z. While its stock returns have been flat over five years, a high-profile investment group recently increased its stake, sparking hope for market outperformance. Its popular brands include Corona, Pacifico, and Modelo, but it faces headwinds like competition and consumption patterns.

Despite facing obstacles, Constellation has seen interest from Warren Buffett’s Berkshire Hathaway. Net sales fell 6% yearly in Q1 of fiscal 2026, leading to a $375 million loss. The company forecasts continued struggles with enterprise organic net-sales growth between -2% and 1% for fiscal 2026. Constellation’s total return levels have lagged the S&P 500 by over 25% in the last year.

Constellation’s financial challenges have not deterred Berkshire’s interest. Despite impairments, the forward P/E ratio of 13 indicates a low-cost stock. The company pays a dividend of $4.08 per share, yielding 2.4%, above the S&P 500 average. Annual dividend hikes for nine consecutive years make it an attractive investment, potentially delivering market-beating returns over the next year.

Investors should consider Constellation Brands’ challenges, but opportunities lie in its rising dividend yield and potential for stock price recovery. Despite net-sales growth concerns, the stock’s low valuation, dividend yield, and Berkshire’s increased stake suggest a promising future. Planning to hold Constellation stock could lead to favorable returns in the coming years.

Read more at Yahoo Finance: Where Will Constellation Brands Stock Be in 1 Year?