Wednesday, August 1, 2012

Molson Coors Canada

On my other blog is some comment on "What I get from my Spreadsheets". See comments blog.

I own not own this stock of Molson Coors Canada (TSX-TPX.B, NYSE-TAP). Since Molson was bought out by Coors, the Canadian listing has been winding down. There is not much activity. The Canadian listing is for Canadian investors who did not want to exchange their stock for TAP stock because then they would have had to pay capital gains tax.

My spreadsheet for Molson Coors Canada tracks the stock from Symbol MOL.A to TPX.B, or in other words tracks Molson Canadian into Molson Coors Canada. This would come up with different results than if I was tracking Coors into Molson Coors. You can still buy Molson Coors on the TSX, but as I have said, there is not much activity. This is now mostly considered to be a US company.

The good thing about this stock is that the dividends are decent and the dividend increases are also decent. The problem for Canadians is that the dividends are paid in US$ so they will fluctuate. The 5 and 10 year dividend increases in US$ is 14% and 12% per year, respectively. The 5 and 10 year dividend increases in CDN$ is lower at 11% and 9.7% per year, respectively.

Their last dividend increase occurred in 2011 and was a healthy 14.3% increase. The Dividend Payout Ratios are good on this stock with the 5 year median DPR for earnings at 29.2% and for cash flow at 25.3%. For Canadians the current dividend at 3.1% is good, but the 5 year median is lower at 2.04%. US$ dividends are very similar. The DPR for earnings is creeping up as the DPR for earnings is expected to be around 35% in 2012. This is still a good ratio, but I just wanted to point out it is creeping up.

Total return has not been great lately on this company. The 5 and 10 year total return in CDN$ is at 2.4% and 7.82% per year, respectively. The dividend portion of this total return is at 2.16% and 3.85% per year, respectively. Capital gain was at 0.24% and 3.97% per year. This means that the dividend portion of the total returns was at 90% and 49% of the total return. The returns in US$ are not far off this except that the 5 year total return was negative.

Mostly the growth in US$ is better than the return in CDN$. Also the number of outstanding shares has increased, especially over the past 10 years, so things like revenue has grown faster than revenue per share. Shares have increased at 1.5% and 8.1% per year over the past 5 and 10 years.

No matter how you look at revenue, it has not grown much and is negative for revenue and revenue per share in CDN$. The only positive growth is revenue over the past 10 years in US$ has grown at 6%. The grown is negative for revenue and revenue per share in US$ for any other periods.

Earnings are a different story. EPS has grown at 8.8% and 9% in CDN$ over the past 5 and 10 years. In US$ currency EPS has grown at 11.8% and 8.2% per year over the past 5 and 10 years.

Cash Flow in US$ terms has grown at 2.1% and 7.1% per year over the past 5 and 10 years. In CDN$ terms, there is no growth over the past 5 years and some 7.3% growth over the past 10 years.

Book Value growth is not great either, with 5 and 10 year growth in CDN$ at 1.3% and 4.9% per year over the past 5 and 10 years. Growth in US$ terms is similar.

The Return on Equity is mediocre with the ROE at 8.8% in 2011 and the 5 year median ROE also at 8.8%. US ROE would be the same.

The current Liquidity Ratio is very good at 1.66. However, it has fluctuated over the years and the 5 year median and 10 year medians are mediocre at 1.12 and 1.02. The current Debt Ratio is very good at 2.62. The 5 and 10 year median values are very good also at 2.44 and 2.08 respectively.

Current Leverage and Debt/Equity Ratios are quite good at 1.62 and 0.62. The 10 year median figures are also good. (Note for all debt ratios they would be the same in US$ and CDN$ terms.)

A good thing for Canadians is that with the stock of this company in their portfolio, they are exposed to an international business as the company sells beers in North America, Europe and Asia. This is a consumer discretionary stock so it is not surprising it has not done well lately. I had held Labatt's for a number of years until it was bought out and made good money on this stock.

Hear O Canada by five musicians conduct an experiment using nothing but instruments made from Molson Canadian bottles and cans. See YouTube.

Molson Coors Brewing Company is a leading global brewer delivering extraordinary brands that delight the world's beer drinkers. It brews, markets and sells a portfolio of leading premium brands such as Coors Light, Molson Canadian, Carling, Blue Moon, and Keystone Light across North America, Europe and Asia. It operates in Canada through Molson Coors Canada; in the US through MillerCoors; and in the U.K. and Ireland through Molson Coors UK. Its web site is here Molson Coors. See my spreadsheet at tpx.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.


  1. I had no idea that Molson was still a listed stock! I new they were bought out a number of years ago but that was about it.

    I would think that if you were interested in this as a dividend stock it would make more sense to buy the CDN one for the tax relief.

    signed Rob long time reader first time commenter.

  2. Thanks for reading my blog.

    Tax relief is only capital gains tax on stock from purchase to exchange to TAP stock. The TPX stock was only set up on the TSX so that Canadian holders of the stock did not have to sell at the take over date and pay capital gains tax.

    There is a trade in TPX stock and I can see advantages in buying it as it trades in CDN$.

  3. I've been thinking about getting into this stock, you're info has been helpful. Do the shares listed on the US market, which is really the only exchange with any activity, qualify for the Cdn dividend tax credit? Would the shareholders at the time of the taxover/merger have lost this benefit?