Molson Coors Brewing Company (TAP), Anheuser-Busch InBev NV (ADR) (BUD), Boston Beer Co Inc (SAM): Be Patient with This Beer Company

Investments in the future

Prior to StarBev becoming Molson Coors Central Europe, it generated sales of approximately $1.0 billion in 2011. Therefore, there’s plenty of demand. Molson Coors expects this acquisition to lead to approximately $50 million of pre-tax operational synergies by 2015, and to improve Molson Coors beer volumes.

The StarBev acquisition is key for Molson Coors, because it gives Molson Coors a stronger foothold in the craft brewing segment — the fastest growing segment in the beer industry. This is also why Boston Beer Co Inc (NYSE:SAM) is so expensive (current trend toward smaller craft brewers). Molson Coors has recognized the trend and is getting on board.

With this acquisition, it’s also evident that Molson Coors is targeting emerging markets, which makes sense considering an increase in the middle-class consumer, and the hesitant consumer in mature markets.

Conclusion

Anheuser-Busch InBev NV (ADR) (NYSE:BUD) is likely to be the safest and best long-term investment in this group, but Molson Coors is a fine company in its own right. When Molson Coors Brewing Company (NYSE:TAP) faces a headwind, it seems to use that headwind as motivation to respond to the challenge, and this is done while its debt is kept under control. This is the type of company you want to invest in. The valuation and generous yield are added selling points. Just keep in mind that the company’s recent acquisition will take time to pay off, and it could be a bumpy road over the next few years.

The article Be Patient with This Beer Company originally appeared on Fool.com and is written by Dan Moskowitz.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Boston Beer and Molson Coors Brewing Company. The Motley Fool owns shares of Boston Beer.

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