Is MDLZ a good stock to buy? We came across a bullish thesis on Mondelez International, Inc. on Quality At A Fair Price’s Substack. In this article, we will summarize the bulls’ thesis on MDLZ. Mondelez International, Inc.’s share was trading at $61.60 as of June 8th. MDLZ’s trailing and forward P/E were 30.71 and 20.49 respectively according to Yahoo Finance.
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Mondelez International, Inc. (MDLZ) is positioned as a leading global snacking company with a portfolio of iconic brands including Oreo, Cadbury, Ritz, Chips Ahoy, Triscuit, and Sour Patch Kids, giving the company significant pricing power, global scale, and resilient consumer demand across both developed and emerging markets. The company continues to benefit from the defensive characteristics of the consumer staples sector while also delivering attractive long-term growth through premiumization, international expansion, and consistent product innovation.
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A major component of the bullish thesis is Mondelez’s strong dividend growth profile, with the company compounding its dividend at double-digit rates over the 3-, 5-, and 10-year periods, highlighting management’s confidence in the durability of cash flows and the strength of the underlying business. Despite these fundamentals, the stock currently appears undervalued based on Dividend Yield Theory, as the forward dividend yield of approximately 3.43% stands nearly 100 basis points above its 5-year average yield of 2.51%, implying a potential valuation discount of roughly 27%.
This disconnect creates an attractive setup for long-term investors, particularly given the company’s stable earnings profile and strong brand equity. In addition, Mondelez is estimated to offer a forward return potential of approximately 15.6%, supported by dividend income, earnings growth, and possible valuation normalization over time. With strong free cash flow generation, a globally diversified business model, and consistent shareholder returns, Mondelez International appears well positioned to deliver attractive risk-adjusted returns going forward.
Previously, we covered a bullish thesis on Mondelez International, Inc. (MDLZ) by Daan Rijnberk in November 2024, which highlighted the company’s resilient pricing power, dominant snacking brands, and margin expansion despite cocoa inflation pressures. MDLZ’s stock price has depreciated by approximately 4.92% since our coverage. Quality At A Fair Price shares a similar view but emphasizes on dividend growth, valuation disconnect, and Dividend Yield Theory-driven upside potential.
Mondelez International, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held MDLZ at the end of the first quarter which was 55 in the previous quarter. While we acknowledge the risk and potential of MDLZ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MDLZ and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
