Large scale brewers of beer and spirits have had a rough go of it in the past 12 months. U.S.-based Molson Coors Brewing Company (NYSE:TAP) has seen its share price decline by nearly 20% since the same time last year, due in part to a reduction in investor optimism surrounding alcoholic beverages, and in part due to investor enthusiasm around cannabis and other sectors which have been viewed, to some degree, as substitutes for alcohol consumption.
Molson Coors is an interesting company in that it provides investors with a modest dividend yield of 2.3%, along with attractive fundamentals including a valuation multiple of just above 10-times earnings, healthy profit margins, and a price to book ratio of 1.14 at the time of writing. These fundamentals make companies such as Molson Coors interesting plays in this current environment, given the size and scale of such companies in a market which is dominated by few players
That being said, Molson Coors has made headlines in Canada of late due to the company’s openness to exploring cannabis-related deals with producers in Canada. The company has announced it is in talks with cannabis producers Aphria Inc. (TSX:APH) and Aurora Cannabis Inc. (TSX:ACB), among others, to look at producing a cannabis-infused beverage for consumption in Canada.
The news propelled shares of Molson Coors higher on investor optimism surrounding this sector – whether or not a deal pans out, Molson Coors is on my watch list as a dividend player with growth potential.
Invest wisely, my friends.
