Molson Coors Beverage Co (NYSE: TAP)

Sector: Consumer Defensive Industry: Beverages - Brewers CIK: 0000024545
Market Cap 9.41 Bn
P/B 1.20
P/E 18.31
P/S 2.27
ROIC (Qtr) -10.58
Div Yield % 3.83
Rev 1y % (Qtr) -2.27
Total Debt (Qtr) 6.29 Bn
Debt/Equity (Qtr) 0.61
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About

Molson Coors Beverage Company, known as TAP, is a prominent player in the global brewing and beverage industry. Its operations span over 30 countries, encompassing a rich history of producing high-quality beverages since its inception in 1913. The company's primary business activities include brewing and packaging beer, along with producing and distributing other beverages such as flavored malt beverages, spirits, and energy drinks. Molson Coors' business operations are divided into two main segments: the Americas and EMEA&APAC. The Americas segment...

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Investment thesis

Bull case

  • Operating cash flow of 1.74B provides strong 48.69x coverage of stock compensation 35.70M, indicating sustainable incentive practices.
  • Robust free cash flow of 1.11B exceeds capital expenditure of 629.10M by 1.76x, indicating strong organic growth funding capability.
  • Retained earnings of 5.58B provide full 1.44x coverage of long-term debt 3.88B, indicating strong internal capital position.
  • Cash reserves of 950.20M exceed inventory value of 820.60M by 1.16x, indicating strong liquidity and inventory management.
  • Retained earnings of 5.58B represent substantial 0.54x of equity 10.33B, indicating strong internal capital generation.

Bear case

  • Operating cash flow of 1.74B barely covers its investment activities of (752.80M), with a coverage ratio of -2.31, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 1.74B provides thin coverage of dividend payments of (375.50M) with a -4.63 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 950.20M provide limited coverage of acquisition spending of (30.90M), which is -30.75x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 1.74B provides minimal -5.08x coverage of tax expenses of (342.20M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of (2.17B) show weak coverage of depreciation charges of 788.10M, with a -2.75 ratio indicating high capital intensity and potential reinvestment needs.

Legal Entity Breakdown of Revenue (2019)

Consolidation Items Breakdown of Revenue (2019)

Peer comparison

Companies in the Beverages - Brewers
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 BUD Anheuser-Busch InBev SA/NV 158.47 Bn 22.27 2.71 -
2 STZ Constellation Brands, Inc. 28.38 Bn 15.19 6.64 10.66 Bn
3 TAP Molson Coors Beverage Co 9.41 Bn 18.31 2.27 6.29 Bn
4 SAM Boston Beer Co Inc 2.47 Bn 26.82 1.25 0.04 Bn
5 FMX Mexican Economic Development Inc 0.00 Bn 0.00 0.00 -
6 CCU United Breweries Co Inc 0.00 Bn 0.00 0.00 -
7 ABEV Ambev S.A. 0.00 Bn 0.00 0.00 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.53 1.27
EV to Cash from Ops. EV/CFO 9.43 19.25
EV to Debt EV to Debt 1.93 16.13
EV to EBIT EV/EBIT 16.68 15.87
EV to EBITDA EV/EBITDA 25.42 23.75
EV to Free Cash Flow [EV/FCF] EV/FCF 11.71 23.14
EV to Market Cap EV to Market Cap 1.29 1.21
EV to Revenue EV/Rev 2.93 4.04
Price to Book Value [P/B] P/B 1.20 2.95
Price to Earnings [P/E] P/E 18.31 20.65
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -5.57 -0.52
Dividend Payout Ratio % Div Payout % (Qtr) -17.40 11.63
Dividend per Basic Share Div per Share (Qtr) 1.85 1.48
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 33.01 18.09
Interest Coverage Int. cover (Qtr) -8.32 -0.01
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 12.85 17.53
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -7.00 23.68
Dividend Growth (1y) % Div 1y % (Qtr) 6.94 2.69
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -265.12 -54.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -166.40 -28.53
EBIT Growth (1y) % EBIT 1y % (Qtr) -239.64 -35.16
EBT Growth (1y) % EBT 1y % (Qtr) -288.46 -31.28
EPS Growth (1y) % EPS 1y % (Qtr) -339.33 -55.71
FCF Growth (1y) % FCF 1y % (Qtr) -5.08 9.67
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -4.09 -0.97
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.49 0.70
Cash Payout Ratio Cash Payout (Qtr) 0.16 0.14
Cash Ratio Cash Ratio (Qtr) 0.18 0.36
Current Ratio Curr Ratio (Qtr) 0.60 1.10
Debt to Equity Ratio Debt/Equity (Qtr) 0.61 0.74
Interest Cover Ratio Int Coverage (Qtr) -8.32 -0.01
Times Interest Earned Times Interest Earned (Qtr) -8.32 -0.01
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -12.30 15.42
EBIT Margin % EBIT Margin % (Qtr) -19.36 8.80
EBT Margin % EBT Margin % (Qtr) -21.69 4.90
Gross Margin % Gross Margin % (Qtr) 38.70 48.53
Net Profit Margin % Net Margin % (Qtr) -18.60 2.52