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June 13, 2018 | Molson Coors Brewing Company | TAP

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This week’s Stock of the Week is a well-known beverage company that can do well no matter what.

Brewing Profits

Molson Coors Brewing Company (TAP) has an exceptionally large number of beer brands and other beverages under its worldwide umbrella. A few of the best-known that it brews and/or distributes are Coors, Miller, Molson, Carling, Modelo, Tecate, Dos Equis, Amstel and Heineken. The firm is also deeply involved in the high-margin craft-beer business through its Blue Moon Brewing Company brands and others.

Beer companies traditionally do well when the economy falters, but Molson Coors stands up well even in a strong economy such as the current one. It has $1.4 billion a year of free cash flow, easily covering its current dividend of $1.64/share/yr., recently yielding 2.3%. Its business is well-diversified internationally with about 70% of sales in North America and the rest in Europe, Latin America and the Asia-Pacific region—so there’s plenty of room for future growth. The firm’s book value is $61/share, and it has been trading near that amount, making it a buying opportunity for a financially strong, defensive stock with 11.5% return on equity.

Revenue should continue its slow-growth pattern for the next several years: It was $11 billion last year and is likely to be $11.03 billion this year and $11.09 billion in 2019.

Fiscal year: December. Earnings per share: 2019 est./$5.12…2018 est./$4.87…2017/$4.55.

Jack Newell is chairman and CEO, Dover Partners Inc., Dayton, Ohio, which manages $100 million. Dover-Partners.com

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