Stocks to Buy Now: Two Intoxicating Recession-Proof Plays

As you look for stocks to buy now, it's as simple as watching the behavior around you...

For example, you might feel like the fiscal cliff, devastation from Superstorm Sandy and more gridlock in Washington is enough to drive you to drink.

And millions of people are doing just that.

Even in the worst of times, alcoholic beverage companies continue to generate rock-steady revenues and surging profits -- no matter what the rest of the market is doing.

Truth is, not many people will give up their nightly rituals, even if times are tough. During the Great Recession, booze purveyors have been particularly resilient, making them good stocks to buy ahead of slow growth in 2013.

Over the last five years, the S&P 500 has returned less than 1.2% annually. By contrast, a Wine, Beer, and Spirits Folio focused on the sector returned 9.1% per year.

Better yet, beer, wine and liquor makers are one of the few industries that have been able to raise prices, according to an industry report by Value Line.

To cash in on this trend, consider the stocks of these two stalwart beverage companies.

Stocks to Buy: This Bud's For You

After pounding a couple pints of your favorite beer, the stresses of modern day society just seem to fade away.Based on Anheuser-Busch InBev's NV (ADR NYSE: BUD) performance over the years, the world is doing just that.

BUD is the world's largest brewing company, with a market cap of $132 billion. The giant produces more than 200 beer brands, including number one seller Budweiser, Stella Artois, and Beck's and has over 20% of overall market volume.

Created in 2008 when InBev agreed to buy Anheuser-Busch for $52 billion,the conglomerate has sales and operations in over 130 countries.

BUD shares have been racking up gains ever since they debuted in 2009, climbing from a low of $36 a share to an all-time high of $90.27 on Oct. 5, 2012.

Profit-taking has driven the stock down to around $83, but the king of brewers has returned nearly 40% year-to-date and averaged annual returns of 20.5% for the last three years.

It also rewards investors with a dividend of $1.31 and is one of the few stocks to earn a number one ranking for timeliness by Value Line.

Analyst Richard Gallagher expects earnings of $4.85 a share on sales of $40 billion in 2012, a healthy 33% increase over last year. He sees the stock rising as high as $110 by 2015.

"Earnings will likely expand at a good clip out to 2015-2017," Gallagher told MSNMoney.

The balance sheet looks solid, with reasonable debt, as the company continues to generate strong cash flow.

Plus, this stock benefits from significant barriers to entry.

"You and I could become microbrewers tomorrow by buying an old warehouse and then making beer," Gerry Sullivan, investment director of the Vice Investor (MUTF: VICEX) told Forbes."We'll succeed locally, but not on a grand scale. Distribution is key."

In July, BUD extended its global reach by swallowing Groupo Modelo for $20.1 billion, bolstering its position in the fast-growing Mexican market.

Modelo's stable includes Corona Extra, the best-selling imported beer in the U.S., as well as Modelo Especial and Pacifico.

The company figures to save at least $600 million a year in cost savings and other so-called synergies from the deal.

Stocks to Buy: A Slow and Steady Grower

Another consistent winner isBrown Forman Corp. (NYSE: BF.B).

The Louisville, KY-based company's brands include staples like Jack Daniel's, Southern Comfort, Finlandia, Canadian Mist and Korbel.

But this is one company that doesn't throw its money around like a drunken sailor.

Instead, BF-B is known for living within its means and slowly growing the business.

Between 2000 and 2010, it spent just $1.7 billion on acquisitions and capital investments while $2.5 billion went to shareholders in the form of dividends and share repurchases.

Its largest acquisition in the past decade was its purchase of the El Jimador and Herradura tequila brands in 2007 for $776 million.

Meanwhile, its competitors have been buying up brands willy-nilly and piling up debt.

BF-B's net debt to equity (D/E) is a manageable 24.1, while its biggest competitor Diageo plc (ADR NYSE: DEO) has furiously financed its growth with debt, racking up a current D/E 130.07.

Still, it has managed to establish a formidable international presence.

International sales increased to 58% of total net revenues in 2012. A decade ago, 78% of revenues were in the United States.

But here's what should really get your attention.

BF-B just hiked its annual cash dividend by 9.3% to $1.02 per share.

That's the 67th consecutive year of quarterly dividends and the 29th consecutive year it has increased the dividend, making it part of the prestigious Standard & Poor's 500 Dividend Aristocrats Index.

Strong management, consistent performance and exposure to global growth make BF-B a worthy stock to buy now.

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