For a rising portfolio

Learn everything you need to know in 'How to Find the Best Growth Stocks' for FREE from The Successful Investor.

Canadian Growth Stocks: CGI Group, CAE Inc., Fortis Inc. Stock and more.

Topic: Growth Stocks

Molson Coors Brewing Co. $70 – New York symbol TAP

MOLSON COORS BREWING CO. $70 (New York symbol TAP; Aggressive Growth Portfolio, Consumer sector; WSSF Rating: Average) took its present form in February 2005 through the merger of Adolph Coors Co. and Molson Inc., a Canadian brewer. It is now the world’s fifth-largest brewer by volume. Major brands include Molson Canadian, Coors Light and Carling.

The two companies merged because they felt they were too small to compete effectively with global brewers that enjoy large economies of scale. The merged company’s main goal was to cut its annual costs by $175 million in the first three years. Molson Coors now feels it can save a further $75 million by the end of 2008. That would give it $250 million in annual savings.

Thanks to these savings, Molson Coors earned $1.56 a share (total $135.8 million) in the third quarter ended September 24, 2006, up 23.8% from $1.26 a share ($108.2 million) a year earlier. These figures included special charges of $28.5 million in the most recent quarter, and $33.5 million in the year-earlier quarter. Sales grew 3.3%, to $1.58 billion from $1.53 billion.

The stock now trades at 17.9 times its likely 2006 profit of $3.90 a share, and 1.1 times its sales of $66 a share. The $1.28 dividend yields 1.8%.

Molson Coors is a buy.

Comments are closed.