Mondelez International (MDLZ) is the oddly named global snack food company responsible for familiar brands like belVita Breakfast Biscuits, Philadelphia cream cheese, Oreo cookies and Ritz crackers, explains Mike Larson, editor of Safe Money Report — and a participant in The MoneyShow Orlando Conference on June 10-12. Learn more here.
The company also sells foreign market products you may have encountered on your travels, including Prince biscuits and Alpen Gold chocolate.
We sold our shares of MDLZ back on March 4 because it was underperforming a strong market. News on the sales and earnings front was also somewhat uninspiring. But, late last month, shares of MDLZ broke out of a 15-month trading range to the upside.
The catalyst? Stronger results. Specifically, sales rose 8% to $7.2 billion on the back of strong global snack food sales. That was a solid result, considering the year-ago period was one of enormous packaged food stockpiling due to the COVID-19 outbreak. Adjusted earnings per share (EPS) also rose 11%.
CEO Dirk Van de Put added that the firm was seeing “continued improvement” in emerging markets and reiterated the firm’s focus on “accelerating growth.” The company forecasts sales growth of at least 3% for the full year and high single-digit EPS growth despite higher input and transportation costs.
What’s more, the firm continues to grow by acquisition. It bought the rest of the U.S. firm Hu Master Holdings in January, a majority stake in the U.K. company Lion/Gemstone Topco Ltd. in March, and the Australian company Gourmet Food Holdings Pty Ltd. in April.
Mondelez’s market-beating dividend yield never went away. It was recently yielding just over 2%, 60 basis points (or 0.6%) better than the SPDR S&P 500 ETF Trust (SPY).
Nor did MDLZ lose the “Buy” grade our Weiss Ratings system has bestowed on it for more than two years. The company also continues to buy back its own shares, including more than $1 billion in the most recent quarter.
All of those factors helped vault MDLZ to the top of my Bedrock Income Portfolio screening system this month. Improving prospects make this food company an appetizing target. My recommendation? Get back on board; let’s scale back in.
