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I Like Beer (and Dividends)

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September 06, 2011 – Comments (11)

I usually think 'large-cap' when looking for stable, dividend paying stocks.  To get a little outside the box, I tried screening for mid-cap income stocks with lower than market volatility, good yield, reasonable valuation, 4 or 5-star CAPS ratings and earnings growth over past few years.  The screen turned up a total of 15 names, including seven profiled in the article.

Of the seven, I think TAP looks the most interesting.  I seem to recall looking at it some time ago and thinking it was expensive.  I may not be remembering correctly (always possible), but it's definitely not expensive now.  11-ish times earnings, 3% yield, and right around book value - Molson Coors is worth a little more digging and a CAPS green thumb. 

Besides, in the words of a Tom T. Hall song, I Like Beer. 

Fool On!

Russ

11 Comments – Post Your Own

#1) On September 06, 2011 at 8:15 PM, Starfirenv (< 20) wrote:

Russ- Ditto.  Here is some investin advice- on topic.  Sent to me via email some time ago Bud would be at the bottom of my list BTW). Enjoy.

"If you had bought $1000.00 worth of Nortel stock at the top, it would now be worth $16.00.

With Enron, you would have $12.50 of the original $1,000.00 invested a year before bankruptcy..

With WorldCom, you would have less than $4.00 left.

If you invested $1000.00 with Bernie Madoff you would have $0

If you had bought $1,000.00 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer, then turned in the cans for the 10 cent deposit, you would have $215.00.

Based on the above, my current investment advice is to drink heavily and recycle."

On a side note, interesting stuff from Wikileaks re Au/China/USD.  ZH covered it as did all the serious PM guys. Worth a read if you missed it. Au/Ag to the moon!  And cold Beer!

Best.  +1 rec

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#2) On September 06, 2011 at 8:36 PM, FleaBagger (28.07) wrote:

In my experience, people who like beer hate American mass-market poser beers such as Coors, and vice versa.

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#3) On September 06, 2011 at 8:53 PM, Mstinterestinman (24.57) wrote:

I agree nothing beats a good specialty beer from a small brewer.

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#4) On September 06, 2011 at 8:56 PM, HarryCaraysGhost (99.59) wrote:

@ Starfirenv

Yeah but I drink bottles so that woul'nt really work for me.

As far as the stock goes my cost basis on BUD is rediculsly low, and I do enjoy my yearly div payments. Although I should add I started buying at 17 when it really was'nt on anybodys radar due too merge and stopped at 40.

Cheers.

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#5) On September 06, 2011 at 9:23 PM, PeyDaFool (77.52) wrote:

I own TAP and I've been reinvesting the dividends for awhile now. The capital appreciation on my investment hasn't changed much since I purchased it but I really like consistent dividend payments.

 I wouldn't expect TAP to grow significantly in the future but, for now, they're making consistent earnings and faithfully dishing out a small percentage of free cash flow out to shareholders.

 They're doing their best to move into international markets and although I don't see the stock doubling in the next five years, it seems reasonably priced and the dividend is secure.

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#6) On September 06, 2011 at 9:30 PM, Starfirenv (< 20) wrote:

Doesn't Illinoise have a bottle deposit? At any rate, if it comes in a can, best have a chilled glass at the ready!  Or, you could think of the cans as "divs" and change your ways.  Msftgetv, I know you are a Bud man (beer wise, of course), but I get a headache looking at a Bud.  You see, I played Tourney softball for 20 some years and Bud, more often than not, sponsored said tourneys.  Well,  the winning team was "awarded" a case of Bud per player (pre PC days) and after battling it out for two days (8,10, 12 games) in the Summer sun to win the thing (way more often than not), we would sit down in the shade and "get it gone".  Hence dehydration headaches from massive quantity..  Maybe all in my head- headaches, pun intended as well as the miss-spell. (Did I get your old alias right?) Cheers to you. And all from the Silver State.

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#7) On September 06, 2011 at 11:20 PM, HarryCaraysGhost (99.59) wrote:

No I read the label of the BUD I'm drinking right now and it says NON-REFUDABLE-BOTTLE.

I know plenty of people who don't care for BUD I think it has to do with the fact they use rice in the brewing process.

That either appeals to you or it does'nt. Personally I can't stand any TAP products. Tastes horrible to me. If I had to go with a scnd choice I would pick an Old Style but that may be a regional thing.

Anyhow I think theres enough marketshare for both.

You got the old name wrong it was Msftgev.

Got that name since the first three stocks I owned were-

MSFT ( sold, I like the Co but the share price really does'nt move, and I needed money to make an oill play when oil was at $35 a barrel)

GE Rode this puppy down to $6.66 and DCA'ed all the way down. (Sold half for a profit)

V- First stock I ever owned bought after the IPO. Have added to where it's an ungodly proportion of my whole portfolio.

Never invested in T, looked at it but the payout ratio was a bit high for my tastes.

Thanks for turning me on to the Burning Man event I was digging it all weekend.

And... Are you ready for some Football!!!

 

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#8) On September 06, 2011 at 11:50 PM, Starfirenv (< 20) wrote:

Yup.  Shouldn't have taken those puffs before the draft though.  Glad someone ck'ed out the BM.  Ultimate.  I think most of the creative development peeps from Silicon Vly were there along with many well knowns- artists, musicians, and cutting edge "out of the box" types. Bowie? Feel the burn, live the burn, be the burn.

Sorry Russ, but it was HCG that jacked your blog.
In case you missed it-

http://caps.fool.com/Blogs/check-it-out-blackrock-city/638008

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#9) On September 07, 2011 at 1:07 AM, ikkyu2 (99.17) wrote:

Good stuff, Russ.

Beer is interesting; the US market is basically a duopoly, AB Inbev competing with MillerCoors, a joint venture between TAP and SABMiller (itself 26% owned by MO.)  Altria estimates their SABMiller stake is worth $10b, so SABMiller must be a $40B player.

SAM's market cap today is reported as $1.04 billion, barely (barley?) a mid cap, and it pays no dividend.  Not really in the same ballpark.  (Couldn't get it at Fenway last time I was there.)

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#10) On September 07, 2011 at 8:29 AM, rd80 (97.31) wrote:

Thanks for all the comments - even the mild hijack. 

I think I've broken the code for getting good response to a blog - mention beer or wine. :)

Smithwicks.  Although I was drinking a Yeungling when I posted the blog last night.  Dixie's Blackened Voodoo if production/distribution ever gets back up to pre-Katrina levels.

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#11) On September 08, 2011 at 7:24 AM, blake303 (29.28) wrote:

Check out Big Rock. Craft brewer with a nice dividend.

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