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:NASDAQ:MDLZ), the snack giant. 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…
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