A Conservative Way To Invest In Cannabis Stocks

In our previous article (see here) we reported the ongoing extremely poor performances in the constituents of the munKNEE Canadian Cannabis LPs Index (DOWN 12.3% MTD and DOWN 27.4% YTD). Perhaps you should consider investing in those companies that have major financial investments in many of the LPs. I am referring to the munKNEE Conservative "Cannabis" Stocks Index which is UP 2.2% MTD and UP 1.0% YTD, in comparison, and has an average dividend yield of 2.9% to boot. 

The munKNEE Conservative "Cannabis" Stocks Index consists of 3 tobacco companies, 2 beer companies, and 1 liquor company that are significantly invested in cannabis companies and they are presented below as to:

  • their stock performances MTD and YTD and as compared to the Canadian cannabis companies they are part-owners of, 
  • their average Wall Street analyst consensus 12-month Price Targets,
  • their consensus Buy/Hold/Sell ratings,
  • their current Dividend Yield, and
  • their projected Price/Earnings Ratios (FWD).
  1. Molson Coors (TAP): UP 11.6% MTD; UP 12.3% YTD
    • has a 57.5%/42.5% joint venture, called TRUSS, with Hexo Corp. (HEXO): DOWN 11.2% MTD; UP 17.8% YTD.
    • 21 analysts:
      • have an average 12-month price target representing a 4.5% DECREASE from its current price,
      • have a consensus HOLD rating,
    • has a dividend yield of 2.7% and
    • has a projected price/earnings ratio (FWD) of 14.7
  2. Imperial Brands (IMBBY): UP 4.4% MTD; DOWN 2.8% YTD
    • has a 19.9% stake in Auxly Cannabis Group (CBWTF): DOWN 14.3% MTD; DOWN 18.9% YTD.
    • 1 analyst:
      • has an average 12-month price target representing a 40.4% increase from its current price,
      • has a BUY rating
    • has a dividend yield of 7.0% and
    • has a projected Price/Earnings Ratio (FWD) of 13.1
  3. Altria Group (MO): UP 3.1% MTD; UP 0.8% YTD 
    • has a 45% stake in Cronos Group (CRON), DOWN 5.7% MTD; DOWN 27.4% YTD.
    • 17 analysts:
      • have an average 12-month price target representing an 8.3% increase from its current price,
      • have a consensus HOLD rating,
    • has a dividend yield of 8.2% and
    • has a projected price/earnings ratio (FWD) of 8.8
  4. British American Tobacco (BTI): UP 2.9% MTD; DOWN 9.5% YTD
    • has a C$221M investment and product development partnership with Organigram Holdings (OGI): DOWN 18.8% MTD; Down 33.3% YTD.
    • has a $56.8 million investment in Charlotte’s Web Holdings (CWBHF), (UP 16.4% MTD; DOWN 31.4% YTD), in the form of a convertible debenture which, if converted (at BTI's discretion), would equate to a 19.9% ownership position in the company,
    • 4 analysts:
      • have an average 12-month price target representing a 42.2% increase from its current price,
      • have a consensus BUY rating,
    • has a dividend yield of 7.4% and
    • has a projected price/earnings ratio (FWD) of 8.4
  5. Constellation Brands (STZ): UP 0.5% MTD; DOWN 1.7% YTD
    • has a 39% stake in Canopy Growth (CGC): DOWN 22.9% MTD; DOWN 40.5% YTD.
    • 28 analysts:
      • have an average 12-month price target representing just a 12.6% increase from its current price,
      • have a consensus BUY rating,
    • has a dividend yield of 1.6% and
    • has a projected price/earnings ratio (FWD) of 19.4
  6. Anheuser-Busch (BUD): DOWN 1.9% MTD; UP 9.2% YTD
    • has a $100 million joint venture with Tilray (TLRY): DOWN 8.3% MTD; Down 13.1% YTD.
    • 9 analysts:
      • have an average 12-month price target representing a 6.4% increase from its current price,
      • have a consensus BUY rating,
    • has a dividend yield of 1.3% and
    • has a projected price/earnings ratio (FWD) of 19.8

In summary, the munKNEE Conservative "Cannabis" Stocks Index:

  • is UP 2.2% MTD and is UP 1.0% YTD
  • and its constituents currently have an average dividend yield of 2.9% and
  • the average 12-month price targets mentioned above represent a 12.9% increase from their current prices.

More By This Author:

Canadian Cannabis LPs Continue To Plummet In April
These 44 Gold Analysts Provide Specific Forecast Dates
ETFs Outperforming The S&P 500, On Average

Disclosure: None

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