Molson Coors: TAP Into This Dividend Stock

Like the majority of other stocks, Molson Coors' (TAP) stock is in correction mode and has fallen 35% since last September. In my opinion, this leaves the stock attractively valued and worth adding to your portfolio based on the following reasons:
In 2016, Molson Coors acquired its remaining stake in MillerCoors, which doubled its revenue base and gave the company the right to distribute the Miller brands internationally. This greater scale is already yielding significant cost synergies and additional savings are expected over the next couple of years, which will enhance profitability and free cash flow. Free cash flow production is strong, which supports a consistent dividend payment. Based on a discounted cash flow model, I expect up to 66% upside potential in the stock. Molson Coors' stock trades below all major valuation multiples relative to historical 5-year averages. Molson Coors' Financial Snapshot 2017 was the first full year after the acquisition of MillerCoors with the following highlights (growth rates are on a pro-forma basis):
Net sales increased 0.2% Non-GAAP EBITDA increased 3.7% Non-GAAP EPS increased 1.1% Global brand volume increased 1% $255 million in post-acquisition cost-savings synergies achieved Molson Coors' balance sheet is not in great shape and probably the worst thing I have to say about the stock. The acquisition of MillerCoors left the combined company over-leveraged. A balance of $11.3 billion in debt means there's basically... Read more

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