Mondelez International Inc (MDLZ): A Growth Story

Page 1 of 2

Companies with significant international market operations are likely to experience higher growth rates and premium valuations. Mondelez International Inc (NASDAQ:MDLZ) is a business that’s likely to experience robust growth given its significant emerging market exposure.  As the middle class grows, so does its willingness to spend on snacks.

Mondelez International Inc (NASDAQ:MDLZ)

The snacking powerhouse

With annual revenues of approximately $36 billion, Mondelez is a global snacking power house and a dominating player in the snack food industry. It owns a strong product and brand portfolio which includes: Cadbury, Nabisco, Ritz, Chips Ahoy, and Oreo.

Mondelez was previously part of Kraft Foods Group Inc (NASDAQ:KRFT), but was spun off into a global snacking business. The decision to spin-off will eventually reward Mondelez International Inc (NASDAQ:MDLZ) investors as the stock will trade at higher price multiple over time, mainly due to international growth opportunities.

It is predicted by management and analysts that Mondelez will experience 5% – 7% top line growth and double digit bottom line expansion over the long term. The key catalysts are the significant emerging market exposure, further margin expansion, and a strong product portfolio.

Growth drivers

Almost 44% of the total revenue for the company is earned from emerging markets including Mexico and the BRIC nations.  As the middle class grows, income levels will grow, and this will likely drive up the demand for food categories offered by Mondelez.

Mondelez also has potential to expand its bottom line over time through margin expansion. It has lower operating margins in the industry as compared to its competitors. Mondelez International Inc (NASDAQ:MDLZ) is working towards cost reduction and achieving operational efficiency, which will likely drive its bottom line.

Another important growth driver for the company is its strong product portfolio. The company has a leading market share in chocolate, biscuits, and sugar confectionery.  73% of its revenue comes from snacks, 17% from beverages, and 10% from cheese and grocery products. With such a dominating product portfolio Mondelez should continue to enjoy consumer loyalty and robust growth.

Other players

Kellogg Company (NYSE:K) is a producer of cereals and convenience foods, with annual revenue of approximately $12.5 billion. Kellogg manufactures its products in 20 countries and markets them in more than 150 countries. The leading cereal brands for Kellogg are Rice krispies, Kellogg’s Frosted Flakes and Special K. Kellogg is well positioned in the industry to grow at healthy rates over the coming years due to productivity gains and strong product innovation.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!