Topic: Dividend Stocks

MOLSON COORS CANADA INC. – Toronto symbols TPX.A $84 and TPX.B $92

MOLSON COORS CANADA INC. (Toronto symbols TPX.A $84 and TPX.B $92; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 193.0 million; Market cap: $17.8 billion; Priceto- sales ratio: 3.2; Dividend yield: 2.3%; TSINetwork Rating: Average; www.molsoncoors.com) sold less beer in 2014, but its ongoing cost-control plan continues to give it more cash for debt repayments and dividends.

In 2014, the company’s worldwide beer volumes fell 1.3%. That lowered its revenue by 1.4%, to $4.1 billion from $4.2 billion in 2013 (all amounts except share price and market cap in U.S. dollars). If you disregard currency exchange rates, revenue gained 0.3%.

Molson Coors continues to improve its efficiency. As a result, its earnings rose 5.7%, to $768.5 million from $727.1 million. Per-share earnings gained 4.6%, to $4.13 from $3.95, on more shares outstanding.

The company’s improving earnings let it cut its long-term debt to $2.3 billion (or 16% of its market cap) from $3.2 billion at the end of 2013.

Molson Coors has also raised its dividend by 10.8%. The new annual rate of $1.64 a share yields 2.5% (2.3% for the class B shares). As well, it plans to buy back up to $1.0 billion of its shares over the next four years.

The class B shareholders elect three directors, while the A shareholders elect 12. But the B shares are more liquid and receive the same dividend.

Molson Coors B is a buy.

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