Molson Coors Brewing Co (TAP) Dividend stock analysis

By: ispeculatornew
Date posted: 02.15.2011 (5:00 am) | Write a Comment  (2 Comments)

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Earlier this month, we posted the top 100 dividend stocks and since then we have looked a bit deeper into some of the stocks that looked the most promising. We did some parts in our free mailing list (sign up now if you have not already) as some of them are truly great potential additions to a  passive income portfolio, at least on the surface.

So just how does Molson Coors Brewing Co (TAP) rank as a dividend stock?

Of course, we will be ranking Molson Coors Breing Co (TAP) based off of the top 20 things that we consider when evaluating dividend stocks.

Dividend Metrics

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Molson Coors has a dividend yield smaller than many others that we’ve looked at in the past at barely over 2% but its growth in recent years has been spectacular to say the least and if it can keep things up, the dividend yield will increase quickly as well. The million dollar question of course remains if the company can keep up such high growth.

Company Metrics

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Most of the numbers cited here are very impressive and would give TAP a great grade but in this specific case, I’m very happy to have added a new criteria, the 5 year sales growth and seeing that sales have diminished over the past 5 years is worrying no doubt. Sure, the company has gone through a merger, difficult economic circumstances and other challenging moments but that number still sticks out and is not enough for me despite the impressive earnings growth, the very interesting payout ratio and very reasonable P/E ratio. I do think the company has solid metrics but that 5 year sales number is worrying.

Stock Metrics

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In technical terms, there is no doubt that the stock does not look very attractive and it’s trend analysis score is as bad as it gets; -100.

Industry Metrics & Fit within your portfolio

Molson Coors Brewing Co is part of a very competitive industry and I do not really see a day where TAP will be able to improve its margins that much. It is the result of a huge merger and that could pay off to some extent but prices remain very inelastic for TAP and I do not see things getting much easier. That being said, sales and profits should be recession proof and remain steady no matter how the economy goes (more or less) and so it is a good fit to most dividend portfolios.

Overall Analysis

If I compare Molson Coors Brewing Co to other dividend stocks such as Verizon (VZ), Coca-Cola (KO) & Pepsi (PEP), McDonald’s (MCD) or others, I would consider the stock to be one around the average. It does have high potential but its current dividend yield is not as high as some of these other ones and I remain nervous about their long term sales.

Do you agree?

Disclosure: No positions on Molson Coors Brewing Co. (TAP)

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2 Comments

  1. Comment by Open source portfolio — February 15, 2011 @ 12:15 pm

    I’ve owned molson for about 6 months now. The only concern I really have is how many shares they’ve released. In the last decade the number of outstanding shares has tripled. On the other hand, the book value has grown to around the stock price which is always great.

  2. Comment by IS — February 15, 2011 @ 8:10 pm

    @Open source portfolio – Thanks for the comment, so you do intend to keep TAP for a long time?

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