Brand Loyalty Is a Valid Reason as to Why Companies like This One Succeed

In the food market, there are many different brands and types of food and snacks that people can choose from. Mondelez International is the company that produces that brands such as Oreo, which is one of America’s most iconic cookies. Being in the snack space certainly has its own competitive nature and unique set of risks, but people have attachments to many of these brands which allows them to have continual sales. Now, let us take a look at their recent numbers to get a quick view of how their health is.

Published over a year ago
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Reviewed by Ellen Johnson

These numbers can be found on a recent 8-K filing and they will cover the full 2016 year highlights. Diluted earnings per share was $1.05, down 76%, but this was due to the prior-year gain related to the coffee business transaction. Operating income margin was 9.9%, down 20.1 percentage points. Net revenues decreased 12.5% and organic net revenue grew 1.3%. Lastly, $3.7 billion in capital was returned to shareholders. These are not the nicest of numbers for investors, but be sure to read past the numbers and determine why they are the way they are. 

Taking a look at the chart using the monthly time frame, we can see that price is beginning to go sideways, which could indicate the buyers are leaving the market and the sellers are going to step in. Higher lows are still being made which means price still might have some juice, but that $46 resistance area is beginning to stand as a tough area of resistance. I would use that in conjunction with the fundamental numbers to determine if there is any significance to that area.

Typically, a company's financial statements are the reports that show the financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Mondelez International income statement, its balance sheet, and the statement of cash flows. Potential Mondelez International investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Mondelez International investors may use each financial statement separately, they are all related. The changes in Mondelez International's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Mondelez International's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.
The goal of Mondelez International fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Mondelez International performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Mondelez International shares is the value that is considered the true value of the share. If the intrinsic value of Mondelez is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Mondelez International. Please read more on our fundamental analysis page.

How effective is Mondelez International in utilizing its assets?

Mondelez International reports assets on its Balance Sheet. It represents the amount of Mondelez resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Mondelez International aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Packaged Foods & Meats space. To get a better handle on how balance sheet or income statements item affect Mondelez volatility, please check the breakdown of all its fundamentals.

Are Mondelez International Earnings Expected to grow?

The future earnings power of Mondelez International involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Mondelez International factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Mondelez International stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Mondelez expected earnings.

And What about dividends?

A dividend is the distribution of a portion of Mondelez International earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Mondelez International dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Mondelez one year expected dividend income is about USD1.06 per share.
Dividend Yield is likely to rise to 0.04 in 2024, whereas Dividends Paid is likely to drop slightly above 1.6 B in 2024.
Last ReportedProjected for Next Year
Dividends Paid2.2 B1.6 B
Dividend Yield 0.02  0.04 
Dividend Payout Ratio 0.44  0.39 
Dividend Paid And Capex Coverage Ratio 4.50  4.27 
Investing in dividend-paying stocks, such as Mondelez International is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Mondelez International must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Mondelez International. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.

Mondelez International Gross Profit

Mondelez International Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Mondelez International previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Mondelez International Gross Profit growth over the last 10 years. Please check Mondelez International's gross profit and other fundamental indicators for more details.

An Additional Perspective On Mondelez International

Risks

Certainly there are risks that are common throughout all industries, but here are a couple that might be unique to this company. For a full list, be sure to look at the most recent 10-K filing. First, the company cites maintain, extending, and expanding their reputation is essential to their success. This brings us back to the importance of having a very well known brand image. Secondly, the company is subject to risks from operating globally. This could be due to laws, taxes, or the global unrest that might cause the company to no longer sell in one region.

Conclusion

The latest full year numbers by themselves did not look good, but that could be a direct effect of something. Be sure to look deep under the hood to determine if this is a one off or an omen of what is to come. Also, compare the ratios and other stats against others in this industry, which could show what company is offering the best value. If you still have questions, be sure to consult an investing professional as they can point you in the right direction.

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Mondelez International. Please refer to our Terms of Use for any information regarding our disclosure principles.

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