Mondelēz International (MDLZ) is emerging as an intriguing passive-income stock, defying the typical perception of slow-moving utility and REIT investments. The company commands significant market shares in the global biscuit, chocolate, and snack bar sectors, with notable growth in emerging markets, which are expected to contribute 40% of revenues by 2025. Despite recent challenges from high cocoa prices impacting earnings, Mondelēz is strategically positioned for recovery, with declining cocoa costs already beginning to benefit the company.
The stock has seen a decline from its 52-week high of over $70 to around $59, pushing its dividend yield to approximately 3.4%. While the near-term outlook may appear murky due to cocoa price volatility, Mondelēz’s aggressive share buyback program and consistent dividend growth signal a commitment to enhancing shareholder value. The company has reduced its diluted share count significantly, which bodes well for future earnings per share.
For investors with a long-term horizon, Mondelēz presents a compelling case. Its strong brand portfolio, emerging market growth potential, and solid free cash flow suggest that the current stock price reflects a temporary setback rather than a fundamental weakness. This creates an opportunity for investors looking to capitalize on a well-positioned company poised for future passive income growth.
Source: fool.com