Consumer staples are something that everyone buys. They're a great defensive stock during uncertain economic times, and they do even better during periods of economic prosperity. I especially like those who pay dividends, and really like those who continually increase their dividends in a sustainable manner.
Mondelez International ticks all the boxes I like to see. For those who aren't familiar with the company, they make the snacks you and I grew up with, and our kids are eating now. Food brands like:
- Honey Maid
- Ritz
- Oreo
- Wheat Thins
- Philadelphia (Cream cheese)
- Chips Ahoy!
(Source)
The list goes on, and it's an impressive list with a lot of brand recognition.
Show Me The Value
A great brand is a good start. To be better, I want to see a value opportunity. I don't want some overpriced stock. I want a stock that will appreciate in value. MDLZ is currently undervalued, as it's trading at about $58.20/share. This is quite a drop from its 52-week high of $71.15. (Source)
This shows me there's potential for stock value appreciation.
The Dividends
I love dividends. I love it even more when companies regularly increase their dividends and don't miss payments. They certainly meet that criteria. (Source)
Some have voiced concerns they're paying more than what their earnings can cover currently. I believe part of this was due to a higher rise in cocoa prices, but these prices have since returned to normal. They're predicting the effects won't be seen until 2027, but that's a short time for a snack food giant and not a major concern in my mind. (Source)
To Take A Bite or Not?
Weighing the pros and cons, Mondelez International is a company I'm willing to invest in. I think they have room to grow. Brand recognition isn't everything, but it's certainly something. As a consumer, I'm willing to pay more for an Oreo than some store brand look-alike that doesn't taste half as good. I think a lot of consumers recognize that as well, so given time I think this stock will do well for my portfolio.
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