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Molson Coors suspends dividend

Molson Coors Brewing Company (TAP) will suspend its dividend in 2020 because of the COVID-19 pandemic. Last year the beer company raised the quarterly dividend for the first time in five years with a 39.0 percent hike to $0.57 per share.

In an form 8-k filed by Molson Coors the company announces the dividend suspension together with the news that some employees in Europe and North America will be furloughed in order to save cash amid the coronavirus crisis.

In the form 8-k TAP states: On May 21, 2020, the Board determined that it will suspend its regular quarterly dividends on its Class A and Class B common shares otherwise payable in the 2020 fiscal year.  In addition, Molson Coors Canada Inc. also determined on May 21, 2020 that it will suspend its regular quarterly dividends on its Class A and Class B exchangeableshares payable in the 2020 fiscal year. The Board’s decision to suspend the dividend follows a number of other steps the Company has taken in recent weeks with the aim of protecting and bolstering the Company’s liquidity position in response to the global economic uncertainty created by the Coronavirus pandemic.

Other beer brewers that cut or cut their dividends this year due to COVID-19 include Dutch Heineken and Belgian Anheuser-Busch Inbev. According to our information, Molson Coors has never lowered dividends in recent decades and has seen significant dividend increases periodically. We see a pattern of double-digit dividend increases followed by several years in which the dividend remains stable. For example, the brewer announced a double-digit dividend increase in both 2014 and 2015 (2014: + 15.6% and 2015: + 10.8%) and subsequently did not increase the dividend in 2016, 2017 and 2018. Last year, in 2019, another very large increase of 39% announced. Unfortunately for investors, a dividend freeze has now followed in connection with the corona pandemic. Beer brewers are in trouble because many public places, where a lot of drinks and beer are consumed, have been closed for months, such as restaurants, sports stadiums and event locations. This saves a huge amount of turnover and therefore now results in the scrapping of reducing the dividend.

Molson Coors Brewing Company is a beer brewer. The company's brands include Coors Light, Coors Banquet, Miller Lite, Molson Canadian, Carling, Staropramen, Sharp’s Doom Bar, Leinenkugel’s Summer Shandy, Blue Moon Belgian White, Hop Valley, Creemore Springs, Crispin Cider. Molson Coors operates through Molson Coors Canada, MillerCoors in the U.S., Molson Coors Europe and Molson Coors International. Prior to the dividend suspension in 2020 Molson Coors had been paying an uninterrupted dividend to shareholders every year for many decades.

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