Updated 3/11/25
Mondelez International (NASDAQ: MDLZ) is one of the biggest names in the snack food industry. If you’ve ever reached for an Oreo, Ritz cracker, or a piece of Cadbury chocolate, you’ve already had a taste of their massive product lineup. With operations in more than 150 countries, Mondelez is a steady player in the consumer staples sector, providing a sense of stability for long-term investors.
For those focused on dividends, Mondelez offers a combination of consistent payouts, moderate yield, and strong free cash flow. But is it the right fit for an income-focused portfolio? Let’s dive into the key details.
Key Dividend Metrics
📌 Dividend Yield: 2.76%
💰 Annual Dividend: $1.88 per share
📈 5-Year Average Dividend Yield: 2.24%
🔄 Dividend Growth Streak: Over 12 years
📊 Payout Ratio: 52.34%
🛡️ Dividend Safety: Moderately strong, though debt is worth monitoring
📅 Ex-Dividend Date: March 31, 2025
💵 Next Payout Date: April 14, 2025
Dividend Overview
Mondelez has earned a reputation as a reliable dividend payer. The forward dividend yield of 2.76% is attractive, sitting above its five-year average of 2.24%. This means investors today are locking in a slightly better return compared to historical norms.
Dividend consistency is a key part of the company’s appeal. Mondelez has increased its payout for more than a decade, demonstrating a commitment to rewarding shareholders. With a payout ratio of 52.34%, the dividend is well-covered by earnings, leaving room for reinvestment in the business.
For investors who prioritize steady income over high-risk, high-reward plays, Mondelez provides the kind of predictable cash flow that makes it easy to hold for the long haul.
Dividend Growth and Safety
Steady dividend growth is one of the more compelling aspects of Mondelez as an income investment. The company has raised its dividend consistently, making it a solid option for those looking for increasing payouts over time.
That said, one area that stands out is its debt load. Mondelez carries $18.54 billion in total debt, with a debt-to-equity ratio of 68.79%. While this isn’t unusual for a company of its size, it does mean that management needs to keep a careful balance between paying down debt and increasing dividends.
The good news is that cash flow remains strong, with $2.74 billion in free cash flow available. This ensures that Mondelez can maintain and even grow its dividend while managing its financial obligations.
Chart Analysis
Trend and Moving Averages
Mondelez (MDLZ) has been in a clear recovery mode after bottoming out late last year. The stock dropped significantly from its highs, but momentum has shifted in recent months, with price now approaching the 200-day moving average. The 50-day moving average has also started to curve upwards, a sign that short-term momentum is improving.
However, the stock is right at a key resistance level. The 200-day moving average, which had previously acted as support before breaking down, could now act as a hurdle. If the price manages to break above it with conviction, it would confirm a bullish reversal. On the other hand, rejection at this level could lead to a pullback.
Volume and Buying Interest
Looking at volume, the recent rally has been supported by increasing levels of buying activity, especially during February. This suggests that institutional investors or larger market participants may be stepping back in. However, volume has not been dramatically higher in the last few sessions, indicating that the stock may need another catalyst to push through resistance.
If volume picks up significantly alongside a breakout above the 200-day moving average, it would strengthen the case for further upside. A low-volume breakout, on the other hand, might not have enough support to sustain a rally.
RSI and Momentum
The relative strength index (RSI) has been climbing steadily and is now approaching the overbought threshold. This indicates strong bullish momentum but also raises the possibility of a short-term pullback or consolidation before the next move higher.
Historically, when the RSI enters overbought territory, stocks tend to either consolidate sideways or retrace slightly before continuing higher. If MDLZ follows this pattern, a brief pause or slight pullback could occur before another push upward.
Recent Price Action
The last five candlesticks show a mix of indecision and strength. While the stock has been moving up, the wicks on both ends of the candles suggest that there is still some back-and-forth between buyers and sellers. The most recent candle closed slightly below the 200-day moving average, indicating that the level is being watched closely.
If the stock can hold above recent lows and push through resistance, the uptrend could continue. However, if sellers start to step in more aggressively, a dip back to the 50-day moving average could be in play before another attempt at breaking higher.
Analyst Ratings
📈 Upgrades:
🟢 On March 11, 2025, Bernstein analysts raised their price target for Mondelez from $69 to $81, maintaining an outperform rating. This adjustment reflects growing confidence in the company’s global reach and strategic acquisitions. Analysts believe Mondelez’s ability to manage commodity price fluctuations, particularly in the cocoa market, positions it well for future growth.
📊 Another upgrade came from a major investment bank in early March, which lifted its rating from neutral to buy while setting a revised price target of $78. The firm cited strong brand loyalty, expansion into emerging markets, and effective pricing strategies as key reasons for its positive outlook.
📉 Downgrades:
🔴 On February 21, 2025, Argus revised its stance on Mondelez, downgrading the stock from buy to hold following the company’s latest earnings report. The earnings per share came in slightly below estimates, prompting concerns about near-term profitability. Analysts pointed to inflationary pressures on ingredient costs and potential softness in consumer spending as reasons for caution.
⚠️ On January 31, 2025, Piper Sandler adjusted their rating downward, lowering the price target from $70 to $63. Their primary concern was rising input costs, particularly in packaging and transportation, which could squeeze profit margins despite the company’s strong sales performance.
💰 Consensus Price Target:
📌 The current consensus price target for Mondelez stands at $69.74, reflecting a mix of optimism about long-term growth and concerns about cost pressures. Analysts overall maintain a moderate buy rating, suggesting confidence in the company’s stability but acknowledging near-term challenges.
Earning Report Summary
Mondelez International just released its latest earnings report, and while the numbers show some resilience, there are definitely a few challenges the company is navigating.
Revenue and Profitability
The company pulled in $9.60 billion in revenue for the fourth quarter, which was just a bit shy of what analysts were expecting. Earnings per share came in at $0.65, missing estimates by a cent. For the full year, Mondelez reported $36.44 billion in total revenue, which is a step up from last year. However, net income dropped to $4.61 billion from $4.96 billion in the previous year, suggesting that rising costs are putting some pressure on profits.
Rising Costs and Profit Margins
One of the biggest hurdles for Mondelez has been the skyrocketing price of cocoa, which has put a dent in profit margins. The company’s adjusted gross profit margin dropped to 31.5% in the fourth quarter, a noticeable decline from previous periods. Higher transportation costs have also added to the strain. To keep up with rising expenses, Mondelez has been increasing prices on its products, but that’s starting to impact sales, especially in Europe, where consumers have been pushing back against price hikes.
How Different Regions Performed
Regional performance has been a mixed bag. In North America, Mondelez actually saw a small boost in sales after slightly lowering prices on some products. That move seemed to help keep demand steady. In Europe, however, price increases caused some shoppers to scale back, leading to a dip in volume. The company is trying to strike the right balance between protecting margins and keeping consumers loyal, which isn’t always easy in a tough economic environment.
Looking Ahead
Mondelez has already warned that 2025 could be a bit rough, with adjusted profit expected to drop by about 10%, which is worse than what analysts had originally predicted. With high commodity costs and potential trade disruptions on the horizon, the company knows it has to stay flexible to manage these headwinds.
Potential Big Moves
There’s also been some buzz about Mondelez possibly making a play for Hershey, which would be a huge move in the snack industry. While that kind of acquisition could be game-changing, it wouldn’t be easy to pull off, especially with the Hershey Trust playing a key role in any deal.
Despite these challenges, Mondelez remains a powerhouse in the global snack market. The company is making strategic shifts where necessary and keeping an eye on long-term growth, even as it navigates some short-term turbulence.
Financial Health and Stability
Mondelez operates in an industry that provides consistent revenue, which is a big plus for dividend investors. In the most recent trailing twelve months, the company generated $36.44 billion in revenue and posted net income of $4.61 billion.
Profitability metrics remain strong, with an operating margin of 17.19% and a return on equity of 16.71%. These numbers suggest that Mondelez efficiently converts sales into profit and effectively utilizes its resources.
A potential concern is the company’s current ratio of 0.68, meaning short-term liabilities exceed short-term assets. While not a major red flag for a company with steady revenue, it does indicate that Mondelez relies on consistent cash flow to meet financial obligations.
Valuation and Stock Performance
At its current price of $67.85, Mondelez trades at a trailing price-to-earnings ratio of 19.93. The forward P/E comes in slightly higher at 22.78, indicating that earnings growth expectations may be somewhat muted.
A PEG ratio of 6.16 suggests that the stock is priced at a premium compared to its expected growth rate. While consumer staples stocks often command higher valuations due to their defensive nature, investors may want to consider whether Mondelez’s current price leaves much room for upside.
The stock has seen a 52-week range between $53.95 and $76.06, meaning it has had some volatility. Currently, shares are trading close to the 200-day moving average of $66.34, signaling a period of consolidation.
Risks and Considerations
1️⃣ Debt Levels – Mondelez carries a significant amount of debt, which could limit financial flexibility in an environment of rising interest rates.
2️⃣ Slower Growth – Revenue growth has been steady but not spectacular, meaning investors looking for rapid appreciation may find better opportunities elsewhere.
3️⃣ Currency Risks – With a global footprint, Mondelez is exposed to fluctuations in exchange rates. A strong U.S. dollar can negatively impact earnings.
4️⃣ Shifting Consumer Preferences – The company’s core business is in snacks, and while demand remains strong, trends toward healthier eating could present challenges over time.
5️⃣ Market Volatility – While consumer staples stocks tend to be more stable, they are not immune to broader market swings. Mondelez’s beta of 0.51 suggests it is less volatile than the overall market, but downturns could still affect share prices.
Final Thoughts
For investors seeking a stable, income-generating stock, Mondelez offers a compelling mix of consistent dividends, brand strength, and reliable cash flow. The dividend yield is attractive, and the company’s track record of growth makes it a solid choice for those looking to build income over time.
The valuation is somewhat high, and debt levels are worth keeping an eye on, but Mondelez remains a reliable option for those who prioritize dividend stability over aggressive growth. With its well-known brands and steady revenue streams, it continues to be a strong contender for dividend-focused portfolios.
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