Rising input costs add risk

Article Excerpt

MOLSON COORS CANADA INC. is still a hold. The beer brewer’s (Toronto symbols TPX.A $88 and TPX.B $80; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 215.7 million; Market cap: $17.3 billion; Price-to-sales ratio: 1.1; Dividend yield: 3.0%; TSINetwork Rating: Average; www.molsoncoors.com) sales in the quarter ended March 31, 2024, rose 10.7%, to $2.60 billion from $2.35 billion a year earlier (all amounts except share prices and market cap in U.S. dollars). That’s mainly because the company raised its selling prices to offset rising ingredient and other costs. The higher revenue plus savings from an ongoing cost control plan lifted its earnings before unusual items by 75.9%, to $0.95 a share (or a total of $202.8 million) from $0.54 a share (or $116.3 million). Molson will probably earn $5.68 a share for all of 2024, and the class B shares trade at just 10.3 times that estimate. However, the company faces increasingly strong competition from larger brewers such as Anheuser-Busch InBev (New York symbol…