Now Trading Below Book Value: Molson Coors And 3 Other Dividend Payers


&l;p&g;&l;img class=&q;dam-image getty size-large wp-image-623294244&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/623294244/960×0.jpg?fit=scale&q; data-height=&q;710&q; data-width=&q;960&q;&g;

Once a month I screen for a certain type of value stock and was surprised to see a local Colorado favorite showing up on the list: the modern form of the old Adolph Coors brewing operation known these days as Molson Coors. That one and 3 other stocks made the grade with lower-than-the-market price/earnings ratios and now trading at a below book value price.


With the market as a whole selling at &l;a href=&q;http://www.multpl.com/&q; target=&q;_blank&q;&g;a multiple of 21&l;/a&g;&a;nbsp;(and &l;a href=&q;http://www.multpl.com/shiller-pe/&q; target=&q;_blank&q;&g;the Schiller p/e at 31&l;/a&g;), it&s;s interesting to find profitable, dividend-paying businesses with p/e&s;s of half that or about half. &l;a href=&q;https://www.goodreads.com/book/show/106835.The_Intelligent_Investor&q; target=&q;_blank&q;&g;Benjamin Graham wrote books&l;/a&g; about finding such situations — here&s;s what seems to fit that basic value criteria right now:


&l;strong&g;Molson Coors&a;nbsp;&l;/strong&g;is New York Stock Exchange traded with the symbol, naturally, of TAP. The big beer operation is available for purchase at a 4% discount from its book value. The price/earnings ratio sits at 11.7. They are showing positive earnings last year and the 5-year record is positive as well.

&l;img class=&q;size-full wp-image-5195&q; src=&q;http://blogs-images.forbes.com/johnnavin/files/2019/03/TAP-weekly-3-13-19.jpg?width=960&q; alt=&q;&q; data-height=&q;928&q; data-width=&q;1240&q;&g; Molson Coors Brewing weekly price chart.


Problem: long-term debt exceeds shareholder equity. That&s;s a concern. Molson Coors is paying a 2.72% dividend. The short float is a big higher than you might expect at 4.9% — if those shorts are ever forced to cover, that might cause something of a rally.

&l;strong&g;Diamondback Energy&a;nbsp;&l;/strong&g;is trading on the NASDAQ at a 10% discount to book value and with a price/earnings ratio of 12.6. Last year&s;s earnings were solidly green. The same can be said of the independent oil company&s;s 5-year record of earnings.

&l;img class=&q;size-full wp-image-5194&q; src=&q;http://blogs-images.forbes.com/johnnavin/files/2019/03/FANG-weekly-3-13-19.jpg?width=960&q; alt=&q;&q; data-height=&q;928&q; data-width=&q;1240&q;&g; Diamondback Energy weekly price chart.


Shareholder equity is greater than long-term debt, a positive. Diamondback&s;s dividend comes to .50%. JP Morgan analysts resumed their &q;overweight&q; rating for the company on March 11th.

&l;strong&g;SM Energy Company&a;nbsp;&l;/strong&g;is another independent oil and gas company that may qualify as a value stock. This one is trading on the New York Stock Exchange at a steep 39% discount to its book value. The price/earnings ratio is 3.5. It&s;s a concern that the company&s;s long-term debt exceeds shareholder equity.

&l;img class=&q;size-full wp-image-5192&q; src=&q;http://blogs-images.forbes.com/johnnavin/files/2019/03/SM-weekly-3-13-19.jpg?width=960&q; alt=&q;&q; data-height=&q;928&q; data-width=&q;1240&q;&g; SM Energy weekly price chart.


That might be part of the reason for SM Energy&s;s short float of 9.15% — again, if forced to cover at some point, shorts can provide fuel for a rally. The company is paying a .63% dividend. In February, Macquarie analysts downgraded the stock from &q;outperform&q; to &q;neutral.&q; Barclay&s;s initiated an &q;overweight&q; rating in January.

&l;strong&g;The Greenbrier Companies&a;nbsp;&l;/strong&g;is NYSE-traded and now goes for a 2% discount to book. The railroad company has a price/earnings ratio of 9.8. Although the most recent quarter-to-quarter earnings are negative, last year&s;s earnings were positive and the 5-year record is green.


&l;img class=&q;size-full wp-image-5191&q; src=&q;http://blogs-images.forbes.com/johnnavin/files/2019/03/GBX-weekly-3-13-19.jpg?width=960&q; alt=&q;&q; data-height=&q;928&q; data-width=&q;1240&q;&g; Greenbrier Companies weekly price chart.

Shareholder equity exceeds long-term debt. The short float at 15% is higher than most NYSE stocks. That could be fuel for a rally if those with shorts are ever forced to cover. Meantime, Greenbrier pays a dividend of 2.64%.

Value stocks require the patience of a long-term investor.

Stats courtesy of &l;a href=&q;https://finviz.com/&q; target=&q;_blank&q;&g;FinViz.com&l;/a&g;.

&l;em&g;I do not hold positions in these investments.&a;nbsp;No recommendations are made one way or the other.&a;nbsp;&a;nbsp;If you&s;re an investor, you&s;d want to look much deeper into each of these situations. You can lose money trading or investing in stocks and other instruments. Always do your own independent research, due diligence and seek professional advice from a licensed investment advisor. I consult — contact me at jnavin@gmail.com.&l;/em&g;&l;/p&g;