Molson Coors Canada

Sound bite for Twitter and StockTwits is: Dividend Growth Consumer. Analysts' recommendations are rather mixed, but price might be low. Beer stocks are probably no longer growth stocks. See my spreadsheet on Molson Coors Canada.

I do not own this stock of Molson Coors Canada (TSX-TPX.B, NYSE-TAP). The US company is called Molson Coors Brewing Co. 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.

Updating the spreadsheet was frustrating. From the statements, and there were three sets, it was not obvious what to use. Web sites of 4-Tradings, Reuters and Google Finance were not helpful in all cases. They all had different EPS and none that I could find in any Molson statements. For example, 4-tradings says that the EPS for 2016 is $1.28 and Google Finance says $9.27 (which I can find and have on my spreadsheet). Reuters Stock Report says EPS $4.33 as does TD WebBroker. So I do not know where 4-Traders, Reuters or TD got their figures.

The problem is that whenever I have had problems sorting out financial statements, so do others that show such things online. I should note that I had no problems with the statements from the third quarter of 2017. The sites I checked are also in agreement although some have not yet been updated for the third quarter.

This company does declare the Canadian dividend and pay in Canadian dollars. However, the dividend is based on what is paid on the American company. For example, the dividend to be paid on in Canadian dollar for December 15, 2016 was announced by the company on November 16, 2016. See the Press Release.

In CDN$ terms dividends yields are moderate as is the dividend increases. The current dividend yield is 2.3% and the 5, 10 and historical median dividend yields are 2.37%, 2.20% and 2.13%. The dividends have growth at 11.8 and 11.4% per year over the past 5 and 10 years in CDN$. Using the year end exchange rate dividends over the past 10 years has grown by 195%. However, the actual dividends paid have grown by 239.8%. The company declares the Canadian dividends in CDN$ ahead of their payment.

However, the story is a bit different in US$ terms. Dividends yields are low to moderate and the growth is low to moderate. Dividends are paid in US$ or based on US$. The current dividend yield is 2.03% (same as the CDN rate). The 5, 10 and historical dividend yields are 2.33%, 2.27 and 1.88%. The dividends have grown by 5.8% and 9.9% per year over the past 5 and 10 years. (Differences are because of exchange rates.)

I consider dividends in the 1% range or below to be low, in the 2 to 3% range to be moderate and above 4% to be good. I consider 0 to 8% dividend growth to be low, from 8% to 15% growth to be moderate and above 15% to be good.

The 5 year low, median and high median Price/Earnings per Share Ratios are 15.70, 17.27 and 18.85. The corresponding 10 year ratios are 13.67, 16.56 and 18.54. The Historical Ratios are 13.38, 16.98 and 19.33. The current P/E Ratio is 20.27 based on a stock price of $80.87 and 2017 EPS of $3.99. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$. The current CDN$ price is $103.95.

I get a Graham Price of $91.03 CDN$. The low, median and high median Price/Graham Price Ratios are 0.82, 0.92 and 1.04. The current P/GP Ratio is 1.14 based on a stock price of $103.95 CDN$. This stock price testing suggests that the stock price is relatively expensive. This testing is done using CDN$. Corresponding US price is $80.87.

I get a 10 year median Price/Book Value per Share Ratio of 1.14. The current P/B Ratio is 1.46 based on Book Value of $12,488M, BVPS of $55.35 and a stock price of $80.87. The current P/B Ratio is some 28% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is done using US$. Corresponding CDN price is $103.95.

I get a historical median Dividend yield of 1.88%. The current dividend yield of 2.03% is some 7.9% higher. The current dividend yield is based on dividends of $1.64 and a stock price of $80.87. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is done using US$. Corresponding CDN price is $103.95.

I get a 10 year median Price/Sales (Revenue) Ratio of 2.43. The current P/S Ratio is 1.64 a value some 32% lower. This current ratio is based on Revenue estimate for 2017 of $11,083M, Revenue per Share of $49.28 and a stock price of $80.87. This stock price testing suggests that the stock price is relatively cheap. This testing is done using US$. Corresponding CDN price is $103.95.

As you can see below the analysts' consensus is all over the place. Revenue is expected to jump some 127% in 2017. If you look at the 12 months ending at the end of the third quarter, the Revenue is up 119%. So the revenue estimates seems reasonable. EPS is expected to decline by 57% in 2017. If you look at the 12 months ending at the end of the third quarter, the EPS is up 13% or at $10.45. The 2017 estimate is lower at $3.99. However EPS to the end of the third quarter is $3.72. So a full year at $3.99 might be reasonable. All the sites giving EPS estimates for 2017 basically agree.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold, Underperform and Sell recommendations. The consensus would be a Buy. The 12 months stock price is $97.46 US$. This implies a total return of 22.60% based on a stock price of $80.87 US$. The total return consists of 20.56% in capital gains and 2.03% in dividends.

Zacks on Benzinga talks about this company's share moving down 15.9% this year while the industry has moved up 25.1%. Goose Hollow Investments on Seeking Alpha thinks that this company is a Buy. Jennifer Salazar on Ledger Gazette talks about Barenberg Bank issuing a Sell Recommendation on this stock. See what analysts are saying about this company on Stock Chase.

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 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 Asset Management Inc. (TSX-BAM.A, NYSE-BAM)... learn more on November 6, 2017 around 5 pm.

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. 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.

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