MDLZ Announces Acquisition of Another Snack Brand

Mondelez International, Inc. (NASDAQ:MDLZ) is an American multinational food, beverage and snack company based in Chicago. Mondelez operates in over 150 countries around the world. The company owns global and local brands such as OREO, belVita, LU biscuits, Cadbury, Chips Ahoy!, Ritz, Sour Patch Kids, Stride and Trident gum.

On Jan. 5, Mondelez announced its completed acquisition of Hu Master Holdings. Hu Master Holdings is the parent company of Hu Products, a US-based snacking company. The company made an initial minority investment in Hu in April of 2019 through SnackFutures, its innovation and venture hub. This minority investment in Hu granted Mondelez a right of first offer to acquire the company. On Jan. 4, Mondelez successfully acquired 100% ownership of the brand. The financial terms of the acquisition have not been disclosed.

Regarding Mondelez stock performance, MDLZ stock price has remained largely stagnant since the start of 2021. Nonetheless, MDLZ stock price is up 40% from its 52-week low of $41.19. MDLZ stock price is just 4% from its 52-week high of $60.00.

MDLZ outperformed expectations on all four of its most recent quarterly reports. In the fourth quarter of 2019, Mondelez stock beat expectations by a margin of $0.01 and reported an earnings per share (EPS) of $0.61. In the first quarter of 2020, MDLZ increased its EPS to $0.69 and beat earnings expectations by $0.03. MDLZ reported a decrease in earnings for the second quarter of 2020 and reported an EPS of $0.63, still managing to beat expectations by a margin of $0.07. In the third quarter of 2020, Mondelez stock replicated its earnings of $0.63 per share, again beating expectations.

Mondelez also has a forward dividend of $1.26 and a forward dividend yield of 2.18%. MDLZ’s last dividend was paid to investors at a rate of $0.315 per share. The company has paid a dividend since 2001.

With the acquisition of Hu, Mondelez will hope to accelerate the company’s revenue growth, which has remained largely stagnant in recent years. MDLZ currently trades at a price-earnings ratio of 27.26, but is projected to bring that figure down to 20.79 once the company resumes its net income growth. The company lost about $800 million in net income the past 12 months, but had previously seen steady growth prior to the 2020 Covid-19 pandemic.