Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Mondelez International Inc (MDLZ), Kraft Foods Group Inc (KRFT): How the Dow Jones Industrial Average (.DJI)’s Recent Rejects Have Fared

Page 1 of 2

For most companies, gaining membership among the 30 stocks of the Dow Jones Industrial Average (INDEXDJX:.DJI) marks the pinnacle of their histories of achievement. Given how much a mark of distinction it is for companies to make it into the Dow, you’d think that getting kicked out of the Dow would be the kiss of death for a company.

Certainly, some companies that the Dow Jones Industrial Average (INDEXDJX:.DJI) evicts from its ranks end up failing, with the most notable recent example being the pre-bankruptcy version of General Motors Company (NYSE:GM) in 2009. Yet surprisingly, many former Dow Jones Industrial Average (INDEXDJX:.DJI) components are still in existence in their original form, and a few have even managed to put in relatively strong performances after leaving the average. Let’s take a closer look at the two companies that have most recently left the Dow.

Mondelez International Inc (NASDAQ:MDLZ)
Kraft Foods Group Inc (NASDAQ:KRFT) and Mondelez International Inc (NASDAQ:MDLZ)

When the former Kraft split itself into two parts, with its North American grocery business keeping the Kraft name and its global snacks businesses taking on the new Mondelez moniker, the Dow decided that neither company was worthy of retaining its spot. Since last September, when the Dow replaced Kraft, Kraft Foods Group Inc (NASDAQ:KRFT) has seen its stock rise 20%. That compares quite favorably to the Dow Jones Industrial Average (INDEXDJX:.DJI)’s roughly 13% rise since then, especially given expectations that Kraft would be the less exciting of the two businesses. In its most recent quarterly results, Kraft Foods Group Inc (NASDAQ:KRFT) notched an impressive earnings beat as the company found surprising growth in areas like Velveeta cheese, Kool-Aid, and Miracle Whip.

Mondelez International Inc (NASDAQ:MDLZ)’s 11% gain has been less impressive. Lower coffee prices and falling candy sales have hurt the company’s revenue, but with powerful brands like Oreo and Cadbury, Mondelez has the stable of products to produce powerful long-term growth. With its growing emphasis on emerging markets that haven’t had exposure to its products before, Mondelez International Inc (NASDAQ:MDLZ) hopes to encourage a whole new group of consumers to bolster the company’s growth.

Citigroup Inc (NYSE:C)

Since Citigroup was taken out of the Dow Jones Industrial Average (INDEXDJX:.DJI), it too has put up an impressive performance, rising nearly 50%. The problem, though, is that Citigroup Inc (NYSE:C)’s exit came four years ago, and the Dow has soared almost 90% in that time.

Nevertheless, Citi has made great strides since then. It has outperformed rival Bank of America Corp (NYSE:BAC), which stayed within the Dow, by a substantial margin, and it has even kept up with healthier banking peers that didn’t suffer to nearly the same extent as Citi did during the financial crisis.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

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 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!