When investing for dividend growth, it pays for investors to focus on buying businesses with immense brand power. This is because brands that are known and loved by consumers tend to carry the pricing power necessary to drive revenue and earnings growth.

The beer, wine, and spirits producer Constellation Brands (STZ 0.24%) has no shortage of well-recognized products. But is the stock a buy for investors seeking dividend growth? Let's peek at Constellation Brands' fundamentals and valuation to resolve this question.

Numerous top-selling brands are fueling growth

Possessing a $45 billion market capitalization, Constellation Brands is among the largest alcoholic beverage companies in the world. The alcoholic beverage company features a lineup of popular products, including Corona Extra and Modelo Especial beers, and Kim Crawford and Robert Mondavi wines. Thanks to these products, Constellation Brands earns the distinction of being the third-largest beer company in the U.S. and the top share gainer across the U.S. beer market.

The New York-based company recorded $2.5 billion in net sales during the fiscal first quarter ended May 31, which was up 6.4% over the year-ago period.

What was behind this respectable top-line growth in the period? These results were driven by 10.6% growth in the net sales of the beer segment to $2.1 billion for the fiscal first quarter. Due to healthy demand for its highly competitive portfolio, Constellation Brands benefited from 7.5% volume growth during the quarter. This demonstrates that consumers were undeterred by roughly 3% price hikes ($60 million of net sales growth) from the company.

Constellation Brands' wine and spirits segment experienced a 10.5% drop in its net sales to $416.3 million in the fiscal first quarter. But this was more related to the divestiture of part of its mainstream and premium wine portfolio last October to The Wine Group than weakness in the segment. 

The company's non-GAAP (adjusted) earnings per share (EPS) increased by 4.8% year over year to $3.04 for the fiscal first quarter. This adjusts for the $123.5 million write-down of Constellation Brands' equity investment in Canopy Growth (CGC 2.02%). The investment has been unfavorably impacted by the broader decline in equity valuations throughout the cannabis industry. 

Analysts believe that Constellation Brands' comparable EPS will rise by 10.1% annually through the next five years. For context, that is moderately superior to the wineries and distilleries industry average annual earnings growth outlook of 8.6%.

A group of people toasting beers.

Image source: Getty Images.

A safe payout set for robust growth

Constellation Brands' 1.4% dividend yield isn't particularly impressive in comparison to the S&P 500 index's 1.5% yield. But when investors also consider that the quarterly dividend per share has nearly tripled since the company initiated a dividend in 2015, it becomes clear that dividend growth prospects make up for lower starting income.

This is especially the case when considering that the dividend payout ratio is poised to register at around 30% for the current fiscal year set to end next February. That leaves Constellation Brands with the necessary capital to seize future growth opportunities and repay debt. 

The stock is priced at a buyable valuation

As a result of both business momentum and the upswing in the broader market, shares of Constellation Brands rallied 11% in the past three months. Yet, the stock's forward price-to-earnings (P/E) ratio of 18.7 remains well below the wineries and distilleries industry average forward P/E ratio of 57.2. This arguably makes Constellation Brands an interesting pick for dividend growth investors at the current $250 share price.