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Molson Coors Is Still A Buy After The Dividend Bump

Published Wed, 11 Sep 2019 02:05:37 -0400 on Seeking Alpha

In my previous article on Molson Coors (TAP), titled "Tapping Molson Coors' Incredible Potential", I went bullish on the company and clarified my long position. While the stock did drop from the levels presented therein, it has since begun a small recovery back up towards June 2019 levels. After a bad 2Q19, a dividend bump and some news coming out now, I believe it to be a good time to revisit the company for a thesis update.
Let's take a look at what's happened in the wonderful world of beer for the past few months - and if the company still presents as appealing an opportunity as it did a few months back.

A weak 2Q19 meets forward potential for the rest of the year No doubt about it - and as some authors have already touched upon, 2Q19 was a bit of a bad quarter for the company. It's never a good thing when (almost) your only business is the brewing, distribution, and sale of beer and your sales drop due to volume declines, of all things.
Let's quickly run through some of the cornerstones of the results here before moving onto more color.
Sales decline of 4.4% (2.9% in constant currency), due to volume decline. Net sales/hectoliter increase of 2.7% due to favorable pricing in all segments and a continued focus on premium brands/portfolio. Worldwide volume decrease due to a decline in all segments, partially as a global trend due to unfavorable weather and World Cup effects (in certain geographies). Cost of goods sold increased by 8.8% due to unrealized losses,... Read more