Is it a good company at a reasonable price? I am assuming in my analysis that Molson Coors Canada and Molson Coors Brewing Company are the same, one on the Canadian market and one on the US market. I would think that analysts are rather negative on this stock because of the lack of Revenue growth over the past 5 years. Growth was 1.67% per year. Dividends were also cut in 2020 and are still not back where they were in 2019. On the other hand, this stock is testing as cheap.
I do not own this stock of Molson Coors Canada (TSX-TPX.B, NYSE-TAP). In 2008 I did a spreadsheet on this stock as it has recently been recommended and generally, beer companies make good money. Labatt’s was one of the original companies that I purchased and I did very well with it before it was bought out. Molson Coors was formed in 2005 through the merger of Molson of Canada, and Coors of the United States.
When I was updating my spreadsheet, I noticed that Revenue has just grown by 1.67% per year. However, in the last 3 years, Revenue has grown by 6.48%, 4.10% , 9.36% respectively. Also, Adjusted Earnings per Share (AEPS) has only grown by 1.50% per year over the past 5 years, but over the last 3 years it has grown by 5.87%, -1.20%, 32.44%, respectively.
If you had invested in this company in December 2013, for $1,014.05 you would have bought 17 shares at $59.65 per share. In December 2023, after 10 years you would have received $315.20 in dividends. The stock would be worth $1,361.53. Your total return would have been $1,676.73. This would be a total return of 5.74% per year with 2.99% from capital gain and 2.75% from dividends. This is in CDN$ for TPX-B.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $59.65 | $1,014.05 | 17 | 10 | $315.20 | $1,361.53 | $1,676.73 |
The current dividend yield is moderate with returning dividend growth. The current dividend is moderate (2% to 4%) ranges at 3.14%. The 5 and 10 year median dividend yields are also moderate at 2.74% and 2.17%. The historical median dividend yield is low (below 2%) at 1.88%. After the dividends were cut by 71% in 2020, they have grown by 209%. However, the dividends are still 10% below the dividends of 2019.
The Dividend Payout Ratios (DPR) are good. The DPR for 2023 for Earnings per Share (EPS) is good at 37% with 5 year coverage is too high at 130%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 30% with 5 year coverage at 28%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 15% with 5 year coverage at 134%. The DPR for 2023 for Free Cash Flow (FCF) is good at 25% with 5 year coverage at 24%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 37.53% | 129.74% |
| AEPS | 30.20% | 28.27% |
| CFPS | 15.07% | 13.31% |
| FCF | 25.19% | 24.13% |
Debt Ratios are mostly fine, but the Liquidity Ratio is too low. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.38 and currently at 0.48. The Liquidity Ratio for 2023 is too low at 0.78 and 0.95 currently. If you added in Cash Flow after dividends, the ratios are still low at 1.29 and currently at 1.37. I like them to be at 1.50 or higher. The Debt Ratio for 2023 is good at 2.04 and 1.96 currently. The Leverage and Debt/Equity Ratios for 2023 are fine at 2.00 and 0.98 and currently at 2.06 and 1.06.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.38 | 0.48 |
| Intang/GW | 1.30 | 1.41 |
| Liquidity | 0.78 | 0.95 |
| Liq. + CF | 1.29 | 1.37 |
| Debt Ratio | 2.04 | 1.96 |
| Leverage | 2.00 | 2.08 |
| D/E Ratio | 0.98 | 1.06 |
The Total Return per year is shown below for years of 5 to 28 to the end of 2023 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | -0.62% | 2.49% | 0.43% | 2.07% |
| 2013 | 10 | 4.77% | 5.74% | 2.99% | 2.75% |
| 2008 | 15 | 5.82% | 4.54% | 2.18% | 2.36% |
| 2003 | 20 | 6.79% | 6.22% | 2.73% | 3.49% |
| 1998 | 25 | 6.05% | 11.34% | 6.42% | 4.92% |
| 1995 | 28 | 5.01% | 10.11% | 6.21% | 3.91% |
The Total Return per year is shown below for years of 5 to 33 to the end of 2023 in US$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 0.00% | 3.93% | 1.74% | 2.19% |
| 2013 | 10 | 2.51% | 3.36% | 0.87% | 2.49% |
| 2008 | 15 | 5.26% | 4.30% | 1.77% | 2.53% |
| 2003 | 20 | 7.18% | 6.72% | 3.98% | 2.74% |
| 1998 | 25 | 7.03% | 5.36% | 3.15% | 2.21% |
| 1993 | 30 | 6.47% | 10.34% | 6.96% | 3.38% |
| 1990 | 33 | 5.87% | 8.25% | 5.56% | 2.69% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 9.39, 11.27 and 13.15. The corresponding 10 year ratios 10.96, 13.63 and 15.86. The corresponding historical ratios are 12.96, 14.81 and 18.54. The current P/E Ratio is 9.74 based on EPS of $7.82 and a stock price of $56.07. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 10.45, 12.54 and 14.64. The corresponding 10 year ratios 11.00, 12.93 and 14.70. The current ratio is 9.80 based on AEPS for 2024 of $5.72 and a stock price of $56.07. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I get a Graham Price of $84.40. The 10-year low, median, and high median Price/Graham Price Ratios are 0.65, 0.77 and 0.91. The current ratio is 0.73 based on a stock price of $56.07. This ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$.
I get a 10-year median Price/Book Value per Share Ratio of 1.10. The current P/B Ratio is 0.97 based on a Book Value of $13,180M, Book Value per Share of $58.01 and a stock price of $56.07. The current ratio is 12% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$.
I also have a Book Value per Share estimate for 2024 of $64.52. This implies a current r4atio of 0.87 based on a stock price of $56.07 and a Book Value of $14,659M. The current ratio is 21% below the 10 year median ratio. This stock price testing suggests that the stock price is cheap. This testing is in US$.
I get a 10-year median Price/Cash Flow per Share Ratio of 7.77. The current P/CF Ratio is 5.86 based on a Cash Flow per Share estimate for 2024 of $9.57, Cash Flow of $2,174M and a stock price of $56.07. The current ratio is 25% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I get an historical median dividend yield of 1.88%. The current dividend yield is 3.14% based on a stock price of $56.07 and dividends of $1.76. The current dividend yield is 67% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I get a 10 year median dividend yield of 2.17%. The current dividend yield is 3.14% based on a stock price of $56.07 and dividends of $1.76. The current dividend yield is 45% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
The 10-year median Price/Sales (Revenue) Ratio is 1.36. The current P/S Ratio is 1.08 based on Revenue estimate for 2024 of $11,759M, Revenue per Share of $51.76 and a stock price of $56.07. The current ratio is 20% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
Results of stock price testing is that the stock price is probably cheap. The dividend yield testing is saying that the stock price is cheap. This is confirmed by the P/S Ratio test. Most of the rest of the testing is saying the same thing.
When I look at analysts’ recommendations for TAP, I find Strong Buy (1), Buy (3), Hold (13), Underperform (1), and Sell (2). This is a very mixed bag. The consensus would be a Hold. The 12 month stock price is $60.02 with a high of $75.00 and low of $47.00. The consensus stock price of $60.02 implies a total return of 10.18% with 7.04% from capital gains and 3.14% from dividend based on a current stock price of $56.07.
Note for TPX-B, I cannot find any analysts recommendations.
There is only one entry on Stock Chase for 2024 and it is a Do Not Buy. Stock Chase gives this stock 3 stars out of 5. Analysts says that there is societal move towards non-alcoholic drinks. Tough Space. There are no recent entries for this stock in Canada. There is a US entry on TAP in a video on Motley Fool. The company put out a Press Release about their fourth quarter of 2023. The company put out a Press Release about their second quarter of 2024.
Simply Wall Street seems to have no report on this stock. They give the Molson Coors Canada TPX.B stock one star out of 5, however, they give Molson Coors Beverage TAP, 3 and one half stars out of 5. There are three warnings on Simply Wall Street of earnings are forecast to decline by an average of 1.6% per year for the next 3 years; has a high level of debt; and unstable dividend track record.
Molson Coors Canada Inc is a large global brewer and distributor of beer and other malt beverages. Its breweries are located across the U.S., Canada, and Europe, with the majority of the company's revenue generated in the Americas. Its web site is here Molson Coors Canada.
The last stock I wrote about was about was Pason Systems Inc (TSX-PSI, OTC-PSYTF) ... learn more. The next stock I will write about will be Brookfield Corp (TSX-BN, NYSE-BN) ... learn more on Wednesday, October 16, 2024 around 5 pm. Tomorrow on my other blog I will write about 10 Best Personal Finance Tips.... learn more on Tuesday, October 15, 2024 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
No comments:
Post a Comment