Molson Coors Beverage Boosts Dividend: A Sweet Deal for Investors

Molson Coors Beverage Company (NYSE:TAP) has just announced a sweet treat for its shareholders – an increase in its quarterly dividend to $0.47 per share. This move, effective as of March 14, 2025, represents a 2.2% increase from the previous year's comparable payment. But what does this mean for investors, and is the dividend sustainable? Let's dive in and find out.



A Taste of History
Molson Coors Beverage has a long history of paying dividends, dating back to 1994. Over the past 30 years, the company has consistently grown its dividend, with a compound annual growth rate (CAGR) of approximately 2.6%. While the growth rate has been more modest in recent years, with a CAGR of 2.4% since 2015, the company's dividend has remained a steady and attractive feature for investors.

Sustainability: The Key Ingredient
To determine the sustainability of the increased dividend, we must examine the company's earnings growth and payout ratio. Molson Coors Beverage has seen its earnings per share (EPS) grow at a solid clip of 38% per annum over the last five years. Additionally, the company's payout ratio is relatively low, at 39.6%, indicating that it is not distributing a large portion of its earnings as dividends.



The company's recent earnings report for the full year 2024 demonstrated strong performance, with revenue of US$11.6 billion (flat on FY 2023) and net income of US$1.12 billion (up 18% from FY 2023). The company's profit margin also improved to 9.7% (up from 8.1% in FY 2023), further supporting the sustainability of the increased dividend.

A Recipe for Success
Molson Coors Beverage's earnings growth, driven by factors such as revenue growth, improving profit margins, and a low dividend payout ratio, supports the company's ability to maintain and increase its dividend. The recent dividend increase to $0.47 per share, which represents a yield of 3.1%, is in line with the industry average and is supported by the company's strong earnings growth and relatively low payout ratio.

In conclusion, Molson Coors Beverage's increased dividend is a sweet deal for investors, supported by the company's strong earnings growth and relatively low payout ratio. With a history of consistent dividend growth and a solid financial performance, Molson Coors Beverage is an attractive income stock for investors seeking a stable and growing dividend. As always, investors should consider a variety of factors when analyzing a company, but this dividend increase is a clear sign that Molson Coors Beverage is committed to returning value to its shareholders. So, raise a glass of your favorite Molson Coors Beverage product and toast to the company's continued success!