John Dobosz is a leading growth and income expert; here, the editor of the industry advisory publications, Forbes Dividend Investor and Forbes Premium Income Report, assesses a favorite idea for the coming year — a play on the brewing sector.
Denver, Colorado-based Molson Coors Brewing (TAP) was formed in the 2005 merger of Coors Brewing Co. and Canada's Molson.
It also owns the Miller Brewing company through its wholly-owned MillerCoors subsidiary, the second-largest seller of beer in North America, trailing only Anheuser-Busch Inbev (BUD). Analysts expect 2018 revenue of $10.97 billion, down 0.3% from 2017.
Molson Coors has grown EBITDA 26.8% annually over the past five years, while the company trades at discounts to five-year average valuations on nearly every metric you can measure.
Molson Coors and its predecessor organizations have been paying dividends for more than 30 years. Annual dividends of $1.64 are not a stretch. Molson Coors produced free cash flow per share of $8.07 over the past 12 months.
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