Is Mondelez International Inc (NASDAQ:MDLZ) An Attractive Dividend Stock?
Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Mondelez International Inc (NASDAQ:MDLZ) has returned to shareholders over the past 10 years, an average dividend yield of 3.00% annually. Does Mondelez International tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for Mondelez International
5 checks you should use to assess a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is it the top 25% annual dividend yield payer?
Has it paid dividend every year without dramatically reducing payout in the past?
Has it increased its dividend per share amount over the past?
Can it afford to pay the current rate of dividends from its earnings?
Will it have the ability to keep paying its dividends going forward?
Does Mondelez International pass our checks?
The current trailing twelve-month payout ratio for the stock is 39.55%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 40.42%, leading to a dividend yield of around 2.55%. Furthermore, EPS should increase to $2.46. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Not only have dividend payouts from Mondelez International fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. In terms of its peers, Mondelez International produces a yield of 2.24%, which is on the low-side for Food stocks.
Next Steps:
If Mondelez International is in your portfolio for cash-generating reasons, there may be better alternatives out there. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three relevant aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for MDLZ’s future growth? Take a look at our free research report of analyst consensus for MDLZ’s outlook.
Valuation: What is MDLZ worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether MDLZ is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
