We're adding a new, promising performer to our model portfolio — snack food giant Mondelez International (MDLZ), explains Mike Larson, editor of Weiss ratings' Safe Money Report.
If you’re not familiar with this company (perhaps because of its odd name), Mondelez is the firm behind global snack food brands like Oreo cookies, Toblerone chocolate, Trident gum and Philadelphia cream cheese.
Shares of Mondelez spent the second half of 2019 digesting their gains. But in late January, they exploded up and out of their trading range after the company reported better-than-expected earnings results. Organic sales rose 4.1% for fullyear 2019, while adjusted earnings per share climbed 8.3%.
Mondelez currently sports a quarterly dividend of 28 cents per share. That’s good for an indicated yield of 1.9% at recent prices, beating the S&P 500.
What’s more, the company has raised its dividend at an annual rate of more than 13% over the past five years. MDLZ has also been buying back oodles of shares over the past few years. That includes $8.1 billion worth last year alone.
The FDA hasn’t yet approved the addition of CBD to foods, but it’s good to see MDLZ looking to the horizon of how to boost profits. Once getting the governmental green light, this could open MDLZ products to a whole new market.
This late in the economic and credit cycles, you don’t want to mess around when it comes to stock selection. You want to make sure your portfolio is weighted toward companies whose sales and earnings will hold up best in a slowdown or recession.
Food companies like MDLZ fit the bill because people still have to eat, even in a bad economy. The stock has also earned a solid “Buy” grade from our Weiss Ratings system for the last 13 months. So, go ahead and buy MDLZ at the market.
