Checking in With Mondelez Stock After Clif Bar Acquisition

The stock looks like a viable option for long-term investors

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Mondelez International, Inc. (NASDAQ:MDLZ) is an American snack, food, and beverage holding company with operations in over 150 countries. MDLZ's portfolio of brands includes various well-known names such as Oreo, Chips Ahoy, belVita, LU, Cadbury Dairy Milk, Milka, Toblerone, Sour Patch Kids, and Trident.

Earlier this month, Mondelez International announced the completed acquisition of Clif Bar & Company, an American maker of energy bars with organic ingredients. According to the holding company, this acquisition expands Mondelez International’s global snack bar business to more than $1 billion, with brands including CLIF, CLIF Kid, and LUNA complementing the company’s refrigerated snacking business Perfect Snacks in the U.S., and performance nutrition business Grenade in the U.K.

Mondelez stock price is up just 1% over the past 12 months, and MDLZ has increased 11% since bottoming out at a 52-week low of $57.63 in October. Additionally, shares of MDLZ have grown 3% just over the past month. However, Mondelez stock is still down approximately 3% year-to-date, and has declined in price 8% since hitting an all-time high of $69.47 in January.

Nonetheless, Mondelez stock continues to offer a rich valuation at a forward price-earnings ratio of 22.32 and a price-sales ratio of 3.05. Although these values are not uncommon for a company valued at $87.6 billion, they are relatively high for the level of growth MDLZ is expected to produce. Mondelez International is estimated to end fiscal 2022 with 6% revenue growth, and 4.3% earnings growth. The snack company is also expected to increase revenues and earnings 4.2% and 7.6%, respectively, for fiscal 2023.

Moreover, MDLZ holds a weak balance sheet with $2.05 billion in cash, and $19.7 billion in total debt. Still, the snack company's safe business model and decent dividend yield of 2.41% make Mondelez stock a viable option for long-term investors.



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