MOLSON COORS BREWING CO. $42 - New York symbol TAP

MOLSON COORS BREWING CO. $42 (New York symbol TAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 181.1 million; Market cap: $7.6 billion; Price-to-sales ratio: 2.3; Dividend yield: 3.0%; TSINetwork Rating: Average; www.molsoncoors.com) is the world’s fifth-largest brewer by volume.

The company continues to realize savings from the June 2008 merger of its operations in the U.S. with those of rival brewer SABMiller to form MillerCoors.

Including its share of the savings from MillerCoors, Molson Coors cut its overall costs by $29 million in the quarter ended September 24, 2011. However, those savings were offset by rising ingredient costs, which pushed down earnings by 11.2%, to $212.4 million, or $1.14 a share. A year earlier, Molson Coors earned $239.1 million, or $1.28 a share.

Sales rose 9.1%, to $954.4 million from $875.0 million. That’s mainly due to favourable exchange rates, higher overseas beer sales and new products.

The stock trades at a low 12.0 times the $3.49 a share that Molson Coors should earn in 2011. Rising sales in emerging markets will probably push up its 2012 earnings to $3.64 a share. That gives the stock a p/e ratio of 11.5.

Molson Coors is a buy.

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