How Has Constellation Brands (STZ) Stock Done For Investors?

Core Viewpoint - Constellation Brands is currently undervalued following a significant sell-off, with a 41% decline in stock price over the past year compared to a 12% gain in the S&P 500 index [1][2]. Group 1: Financial Performance - The company's top beer brands, including Corona and Modelo, have experienced declining sales due to economic pressures on consumers, contributing to a 15% year-over-year decline in total revenue last quarter [2][4]. - Despite the sales decline, Constellation Brands generated over $1.8 billion in free cash flow over the last four quarters, indicating strong profit generation capabilities even during downturns [8]. - The company has maintained a dividend payout of 39% of its free cash flow over the past year, with a forward dividend yield of 2.87% [8]. Group 2: Strategic Initiatives - Management is focusing on long-term growth by divesting lower-end wine and spirits brands, such as the recent sale of Svedka vodka for $409 million, to invest in more profitable premium segments [5][6]. - Proceeds from asset sales are being utilized for share buybacks, debt repayments, and investments in beer brands, which are expected to drive long-term earnings growth [6]. Group 3: Market Position - Constellation Brands holds distribution rights to popular imported beer brands in the U.S., retaining top market share positions despite recent sales challenges [4][5]. - The stock is currently trading at 13.7 times free cash flow, suggesting it may present a buying opportunity as the business stabilizes and revenue growth resumes [7].