If you are an income investor, then Molson Coors Brewing Company (NYSE:TAP) should be on your radar. Molson Coors Brewing Company manufactures, markets, and sells beer and other malt beverage products in the United States, Canada, Europe, and internationally. Over the past 10 years, the US$12b market cap company has been growing its dividend payments, from $0.80 to $2.28. Currently yielding 4.1%, let's take a closer look at Molson Coors Brewing's dividend profile.
What Is A Dividend Rock Star?
It is a stock that pays a consistent, reliable and competitive dividend over a long period of time, and is expected to continue to pay in the same manner many years to come. More specifically:
- It is paying an annual yield above 75% of dividend payers
- It consistently pays out dividend without missing a payment or significantly cutting payout
- Its dividend per share amount has increased over the past
- It is able to pay the current rate of dividends from its earnings
- It is able to continue to payout at the current rate in the future
High Yield And Dependable
Molson Coors Brewing's dividend yield stands at 4.1%, which is high for Beverage stocks. But the real reason Molson Coors Brewing stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you're investor who wants a robust cash inflow from your portfolio over a long period of time.
If there is one thing that you want to be reliable in your life, it's dividend stocks and their constant income stream. In the case of TAP it has increased its DPS from $0.80 to $2.28 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes TAP a true dividend rockstar.
Molson Coors Brewing has a trailing twelve-month payout ratio of 40%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 51% which, assuming the share price stays the same, leads to a dividend yield of 3.9%. Furthermore, EPS should increase to $4.44. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
Investors of Molson Coors Brewing can continue to expect strong dividends from the stock. With its favorable dividend characteristics, if high income generation is still the goal for your portfolio, then Molson Coors Brewing is one worth keeping around. However, given this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company's fundamentals and underlying business before making an investment decision. I've put together three key aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for TAP’s future growth? Take a look at our free research report of analyst consensus for TAP’s outlook.
- Valuation: What is TAP worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether TAP is currently mispriced by the market.
- Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.