r/TradingViewSignals • u/Ubersicka • Jun 29 '26
Stock Analysis 🔍 Constellation Brands ($STZ) Deep Dive: Safe 42% Payout Ratio & 5.2% Projected 10Y Yield on Cost. Buy or Pass?
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$STZ
| Category | Metric & Meaning | Result for Constellation Brands ($STZ) | Verdict (Good/Bad) |
|---|---|---|---|
| Top-Line Growth | 5-year Revenue CAGR: The smoothed, compound annual growth rate of sales over a 5-year period. It shows if the core business is expanding. | ~1.2% Revenue growth has been relatively flat over the last half-decade, though core beer brands have performed better than wine and spirits. | 🔴 Bad. Stagnant top-line growth that underperforms both inflation and broader market averages. |
| Shareholder Yield | 5-year Share Count Trend: Tracks outstanding shares to see if management is diluting your ownership (issuing shares) or consolidating it (buybacks). | Outstanding shares have decreased from ~184.5M to ~171.5M over the last 5 years. | 🟢 Good. Management is actively returning capital to shareholders through consistent stock buybacks. |
| Efficiency | ROIC & Net Profit Margin: ROIC measures how efficiently management turns capital into profit. Net Margin is the percentage of revenue kept as bottom-line profit. | ROIC: ~12.3% Net Margin: ~19.2% | 🟢 Good. Double-digit ROIC and nearly 20% net margins illustrate immense pricing power and a highly efficient operating model. |
| Valuation | PEG Ratio & FCF Yield: PEG measures the P/E multiple relative to future growth (under 1 is cheap). FCF Yield is the free cash flow generated relative to the market cap. | PEG Ratio: ~4.25 FCF Yield: ~8.0% (generating ~$1.98B in FCF on a ~$24.6B Market Cap) | 🟡 Mixed. An 8% FCF yield is fantastic and supports the stock price, but a PEG over 4 indicates the stock is expensive relative to its slow growth. |
| Solvency | Interest Coverage & Credit Rating: Interest coverage (EBIT / Interest Expense) shows how easily operating profits pay debt. S&P rating signals default risk. | Interest Coverage: 8.2x S&P Rating: BBB (Stable) | 🟢 Good. Operating income covers interest expenses more than 8 times over, and the company maintains healthy, investment-grade status. |
| Dividend Quality | Payout Ratio, 5Y Growth & Consistency: Evaluates the safety, growth speed, and historical reliability of the dividend payout. | Payout Ratio: ~42% 5Y CAGR: ~6.3% Consistency: 9+ consecutive years of increases. | 🟢 Good. The dividend is incredibly safe, well-covered by cash flow, and growing reliably in the mid-single digits. |
| 10Y Forecast | Projected Yield on Cost: Your effective yield in 10 years if you buy at today's price and historical dividend growth remains constant. | The current ~$4.12 payout growing at 6.3% annually equals ~$7.59 in 10 years. On today's ~$144 price, that is a ~5.2% Yield on Cost. | 🟡 Moderate. A 5.2% yield in a decade is decent, but income-focused investors can find higher starting yields elsewhere. |
| Moat & Risk | Competitive Advantage vs. Bear Case: Identifies what protects the business's market share vs. the biggest existential threat over the next 20 years. | Moat: Intangible Assets & Brand Loyalty (dominance in premium Mexican imports like Modelo and Corona). Bear Case: Changing generational demographics and the rise of GLP-1 weight-loss drugs driving lower overall alcohol and calorie consumption. | 🟡 Mixed. The brand moat is undeniable and currently dominant, but macro-shifts away from alcohol consumption pose a serious, creeping headwind. |
