Molson Coors Lifts Dividend Despite Tough Beer Market


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With an annualized dividend growth rate of 10%,Molson Coors Brewing ( TAP )isn't shy about returning money to shareholders despite a challenging operating environment.

In February, as part of its Q4 earnings release, the company raised its quarterly dividend 16% to 37 cents a share, giving it an annual yield of 2.6%.

In the highly competitive beer market, where demand is waning, Molson Coors is holding its own, partly because of strength in the craft beer business in the U.S.

Formed in 2005 by the merger of Molson Canada and Coors in the U.S., the company has a three-year earnings growth rate of 4% and a sales growth rate of 11%. Sales growth like that is nothing to scoff at, although meaningful growth has been hard to come by in recent quarters.

In 2007, the company formed a joint venture with SABMiller and named it MillerCoors. Brewing operations were basically combined to better compete with Anheuser-Busch InBev in the U.S.

Molson Coors sells a portfolio of leading premium brands, including Coors Light, Molson Canadian, Carling, Staropramen and Blue Moon across the Americas, Europe and Asia. The company also distributes popular Mexican brands like Corona, Negra Modelo and Pacifico brands.

The company's first foray into emerging markets came in 2012 when the company acquired European brewer StarBev from CVC Capital Partners for just over $3.5 billion.

Last month, Denver-based Molson Coors reported Q4 profit of 68 cents a share, down 1% from a year ago. Sales were flat at nearly $1.03 billion. Worldwide beer volume rose 8.5% to 59.7 million hectoliters.

Molson Coors Brewing is trading tightly after a recent base breakout over 57.28. The 5% buy zone extends to 60.14. An up/down volume ratio of 1.1 points toward solid demand for shares in recent weeks.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance Investing Ideas
Referenced Stocks: TAP

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