MDLZ Stock Overview
Mondelez International, Inc., through its subsidiaries, manufactures, markets, and sells snack food and beverage products in the Latin America, North America, Asia, the Middle East, Africa, and Europe.
Mondelez International, Inc. Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$54.83|
|52 Week High||US$69.47|
|52 Week Low||US$54.72|
|1 Month Change||-11.52%|
|3 Month Change||-13.44%|
|1 Year Change||-5.81%|
|3 Year Change||-2.05%|
|5 Year Change||33.31%|
|Change since IPO||75.46%|
Recent News & Updates
Mondelez International: Buy The Snack Giant
Summary Mondelez is the global market leader in biscuits and No. 2 in chocolate. The company is growing organically and by bolt-on acquisitions. The company is cutting costs and improving margins. The stock is a Dividend Challenger and is yielding 2.4% with solid dividend safety metrics. The stock is undervalued. Slow and steady wins the race. It holds true for investing in equities because of reversion to the mean. For instance, the latest group of new tech stocks were trading at bubble valuations and plummeted when the Federal Reserve started tightening. On the other hand, some companies continually generate wealth for investors by slowly and steadily returning cash in the form of dividends and share buybacks. One company that comes to mind is Mondelez International (NASDAQ:MDLZ). There is much to like with market leadership, rising revenue and earnings, and solid dividend growth. The stock is a Dividend Challenger and trading at a reasonable valuation. I view Mondelez as a long-term buy. Overview of Mondelez Mondelez was formed in 2012 after the original Kraft Foods split into two companies, Mondelez International and Kraft Foods Group. 3G Capital eventually acquired Kraft Foods Group and later merged it with Heinz forming Kraft Heinz Company (KHC). Subsequently, Mondelez underwent a reorganization. First, the company placed its coffee business into a joint venture with Douwe Egberts, eventually becoming JDE Peet's (JDEP) (OTCPK:JDEPF), listed on the Amsterdam exchange. Also, the firm owned shares of Keurig Green Mountain, which ultimately became ownership of Keurig Dr. Pepper (KDP) after the merger with Dr. Pepper Snapple Group. As a result, Mondelez still has some ownership of coffee stocks, including ~22.7% of JDE Peet's and ~5.3% of Keurig Dr. Pepper. Mondelez owns brands from the original Nabisco, Cadbury, and LU Biscuits companies, making it one of the largest snack foods companies in the world. They have the number one global position in biscuits and the number two in chocolate and gum. Mondelez's global brands are Nabisco, Oreo, Milka, Philadelphia, belVita, Cadbury, Toblerone, Trident, Tang, and Halls. Other essential brands are Ritz, Tate's, Lacta, LU, What Thins, Swedish Fish, Triscuit, and Chips Ahoy. Many of the brands are No. 1 in their market segment or geography. Total revenue was $28,720 million in 2021 and $29,878 million in the last twelve months. Mondelez Investor Relations Growth and Restructuring Strategy for Mondelez Mondelez plans to grow organic revenue by about 3 to 5% per annum. The company generally follows the playbook of most packaged food companies by introducing product extensions, expanding distribution, and marketing. However, Mondelez is an acquisitive company adding growth through bolt-on acquisitions. The company has acquired eight companies since 2018, adding $2+ billion in revenue. The strategy is seemingly to buy promising brands as a platform where the company is underrepresented in a segment, price point, or geographically. Subsequently, the firm expands the new brand. The eight acquired brands are Tate's Bake Shop, Perfect Snacks, Give & Go, Hu, Grenade, Gourmet Foods, Chipita, and Ricolino. Along these lines, Mondelez announced the acquisition of Clif Bar for $2.9 billion, which has the No. 1 position in protein and energy bars. The new brand will add about $800 million in sales. Mondelez Investor Relations Besides top-line growth, Mondelez is expanding margins through cost cutting. As a result, the company has reduced emissions, food waste, and water usage compared to 2018. It has also reduced packaging waste, moving to 100% recyclable packaging by 2025. Mondelez is exiting non-core assets after a strategic review. Instead, the company will focus on biscuits and chocolate. Consequently, it will divest the developed market gum and global Halls business representing about $920 million in revenue. The change in focus includes selling the Halls, Stimorol, Hollywood, Dentyne, and Trident brands. In addition, the firm is selling its stakes in JDE Peet's and Keurig Dr. Pepper. It plans to use the proceeds to add to the snack portfolio. Mondelez Investor Relations Competitive Advantages Mondelez has several competitive advantages. First, the company is far and away the market leader in biscuits, with about 17% global market share in the $104 billion market category. Campbell (CPB) is No. 2 but with only about 3 to 4% market share. In fact, Mondelez has a greater market share and faster growth than several of its largest competitors combined. Besides Campbell's, other competitors include Kellogg (K), Pladis, Ferrero, PepsiCo (PEP), Britannia, Parle, Barilla, and Nestle (OTCPK:NSRGY). This scale and size allow Mondelez to spread distribution and manufacturing expenses over more brands and greater volume. Next, the company is a strong No. 2 in the global chocolate market with about 12% global market share in the $112 billion category. Privately held Mars is the No. 1, but Mondelez is growing faster and gaining market share. Only Hershey (HSY) is growing faster. Besides Mars and Hershey, other competitors include Ferrero, Nestle, Lindt, Storck, Pladis, Lotte, and Uniconf. Moreover, Mondelez has highly recognizable brand names. Consumers know brands like Oreo, Cadbury, and belVita well. The combination of excellent brand name recognition, leading market share, and high sales volumes gives the company an edge for product placement at retailers. Lastly, Mondelez has excellent and disciplined capital allocation focusing on reinvesting the core business, tuck-in mergers and acquisitions, dividends and share repurchases, and the balance sheet. Risks for Mondelez Mondelez faces inflation and input cost risks despite its strength and market leadership. Most inputs are commodities like sugar, flour, cocoa, wheat, and dairy and prices fluctuate. The company is also subject to energy costs, labor, and freight risks. As a result, higher prices can negatively affect margins. In addition, as a US company with global operations, a strong dollar will cause foreign exchange headwinds. Dividend Analysis Mondelez is paying a forward annual dividend of $1.54, giving a dividend yield of 2.40%, more than the 5-year average of 2.14%. The dividend yield is also greater than the average yield of the S&P 500 Index. In addition, the company has increased the dividend for nine years, with the streak going back to 2014, making the stock a Dividend Challenger. The dividend yield and double-digit growth make the stock attractive to many investors. Mondelez last increased the quarterly dividend in July 2022 to $0.385 from $0.35 per share. The trailing dividend growth rate has been 13.06% CAGR in the past five years. Moreover, the reasonable payout ratio of ~46% combined with rising earnings per share means the dividend will likely be raised in the future. Portfolio Insight Mondelez has excellent dividend safety from the context of earnings, free cash flow (FCF), and the balance sheet. Consensus estimates in fiscal 2022 for Mondelez are $2.91 per share, and the dividend is $1.54 per share. These numbers produce a forward payout ratio of ~48%. Our target payout ratio is 65%, indicating the dividend is safe with a decent buffer and room for growth. Mondelez had approximately $4,316 million in free cash flow (FCF) in the last 12 months. The dividend needed about $1,907 million, giving a dividend-to-FCF ratio of ~44%. This value is excellent and below our threshold of 70%, suggesting little risk to the dividend based on FCF. The balance sheet has acceptable liquidity, leverage, and interest coverage. At the end of Q2 FY 2022, Mondelez had $605 million in short-term debt, $746 million in current long-term debt, and $17,861 million in long-term debt. Total and net debt has been remarkably consistent in the past several years. Total debt was offset by $1,924 million in cash and equivalents and $126 million in short-term investments. As a result, the leverage ratio is ~2.6X, and interest coverage is roughly 14.2X, both solid for a consumer staples company. Cisco has a BBB/Baa1 lower-medium grade investment credit rating from S&P Global and Moody's. Debt is not troubling from the perspective of dividend safety. Valuation Mondelez's stock price has performed relatively well in 2022. The year-to-date total return is about (-7.0%), and the 1-year return is ~1.2%, much better than the S&P 500 Index and Nasdaq. Moreover, the stock is trading at a price-to-earnings ratio of approximately 21.1X, slightly below its range in the trailing five years and ten years.
There's Been No Shortage Of Growth Recently For Mondelez International's (NASDAQ:MDLZ) Returns On Capital
Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key...
Mondelez: Great Company But Overvalued
Summary Mondelez is among the best companies in its industry in terms of profitability, but it is currently too expensive. Over the past 10 years, revenues have decreased but operating income has increased. Oreo, Tuc, Philadelphia, Ritz, and Milka succeed in making Mondelez generate stable cash flow over time. I do not completely disagree with those who open a position now since I value this company; however, I believe it can be bought at a lower price in the future. The results for the first half of 2022 were quite good despite the current adverse macroeconomic scenario. Investment thesis Considering the results of recent years and especially those of the first half of 2022, Mondelez (MDLZ) is a very solid company that manages to improve even when the economy is struggling. It is among the best companies in its industry, with profit margins that far exceed the average. However, despite this good premise I would not buy this company currently, as $60 per share is too much compared to the fair value of $42. So, my sell rating is not because of a problem with the company, but simply because of the current price per share. Mondelez is a great company and I would like to invest in it, but not at this price. Growing profitability over the past 10 years Mondelez is one of U.S. top companies in the sale of confectionery, food, snack and beverage products, thanks to its world-renowned brands. Major brands include Oreo, Tuc, Philadelphia, Ritz, and Milka. Over the past decade, the company's revenues have declined but profit margins have increased, thus leading to improved profitability. This company's internal efficiency is improving and its market power allows it to increase the price of its products without necessarily leading to a major reduction in revenues. TIKR Terminal As can be seen from this graph, 2012 revenues were about $5 billion higher than LTM revenues; thus, at first glance it might be thought that there was a worsening. However, looking in more detail at the intermediate margins in the income statement we can see that operating income has actually never been higher. Profitability over the past 10 years has improved, and this has been mainly due to a reduction in operating costs. TIKR Terminal Selling general & admin expenses were about $2.50 billion higher in 2012. However, only a small part of the reduction in these costs was attributed to the reduction in selling and marketing costs; in fact, this segment suffered a reduction of only $251 million. This I consider to be positive, as the company reduced operating costs without necessarily affecting advertising costs too much. In addition, besides the reduction in operating costs, the reduction in interest expenses on debt should also be mentioned: in 2012 interest expenses were $830 million higher. In 2012 the operating margin was 11.80%, currently it is 16.50%, a rather important improvement for a defensive company like Mondelez. Considering that the industry median is 8.57%, this gives even more of an idea of the market power of this company. It is hard to find a more profitable company than Mondelez in this sector. A quite positive 2022 so far The problems of the current macroeconomic scenario are affecting all companies; however, there are some that are experiencing these difficulties less. Mondelez, thanks to its efficiency and stability of its core business, is definitely among the companies that are suffering the least; in fact, its profitability has even improved compared to last year. MDLZ Q2 2022 Mondelez's organic revenue growth has been remarkable in the last two quarters, and in the second quarter it even touched double digits. This growth is directly influenced by two aspects: The growth in business volumes: consumers are buying more and more Mondelez products. The increase in prices for individual products: in Q1 it was 4.80% and in Q2 it was 8%. This increase was greater than in other years because the company wanted to burden consumers with increased operating costs due to inflation at 40-year highs. In light of this data, it is interesting to note how Mondelez manages to achieve ever higher sales volumes despite rising prices, especially considering that its products are not essential to a balanced diet. I suppose the growing trend of obesity benefits Mondelez's coffers, as daily consumption of extremely sugary products is becoming more common. Suffice it to say that since 1975 the obesity rate worldwide has almost tripled, especially among younger people. Although the negative consequences of obesity are now well known, the excessive consumption of sugar leads to a kind of addiction from which it is difficult to break free. Looking at Mondelez sales by region, it would seem that this upward trend is affecting emerging markets the most, as developed markets already have a serious obesity problem, especially the U.S. MDLZ Q2 2022 Organic revenue growth in emerging markets was 19.40% in the first half of 2022, while only 6% in developed markets. The increase in prices due to high inflation in emerging countries has certainly greatly influenced the bottom line (especially Argentina), however, the strong increase in volumes should also not be underestimated. From a future perspective, I expect emerging markets to provide the greatest benefit in terms of revenues for Mondelez. Finally, wanting to delve further into the topic of revenues, it is also good to clarify where they come from and how the various segments have reacted to the first half of 2022.
These 4 Measures Indicate That Mondelez International (NASDAQ:MDLZ) Is Using Debt Reasonably Well
David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...
|MDLZ||US Food||US Market|
Return vs Industry: MDLZ underperformed the US Food industry which returned -1.5% over the past year.
Return vs Market: MDLZ exceeded the US Market which returned -23.2% over the past year.
|MDLZ Average Weekly Movement||2.7%|
|Food Industry Average Movement||5.4%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.6%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: MDLZ is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.
Volatility Over Time: MDLZ's weekly volatility (3%) has been stable over the past year.
About the Company
|2000||79,000||Dirk Van de Put||https://www.mondelezinternational.com|
Mondelez International, Inc., through its subsidiaries, manufactures, markets, and sells snack food and beverage products in the Latin America, North America, Asia, the Middle East, Africa, and Europe. It provides biscuits, including cookies, crackers, and salted snacks; chocolates; and gums and candies, as well as various cheese and grocery, and powdered beverage products. The company’s snack brand portfolio includes Cadbury, Milka, and Toblerone chocolates; Oreo, belVita, and LU biscuits; Halls candies; Trident gums; and Tang powdered beverages.
Mondelez International, Inc. Fundamentals Summary
|MDLZ fundamental statistics|
Is MDLZ overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|MDLZ income statement (TTM)|
|Cost of Revenue||US$18.55b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||2.82|
|Net Profit Margin||12.93%|
How did MDLZ perform over the long term?See historical performance and comparison