Mondelez International, Inc. (NASDAQ:MDLZ) gives investors the chance to own some of the world’s most recognizable brands, steady consumer demand, and a growing stream of dividend income. With names like Oreo, Cadbury, and Toblerone, Mondelez is a leader in the global snacking business. Its beverages segment, which includes Bournvita and Tang, also gives it exposure to another industry. While Mondelez offers a combination of brand strength and dividend growth, investors looking for higher income may want to explore other beverage stocks that offer even more attractive dividend yields.
That said, higher cocoa prices, shifting consumer tastes, and tighter profit margins mean it’s important to look beyond just the dividend yield and consider how sustainable those payouts really are.
For the second quarter of 2026, Mondelez reported a 4.1% bump in total revenue, with organic revenue up 2.2% and volume and mix improving by 0.7%. Diluted earnings per share jumped sharply to $1.20, but on an adjusted basis, EPS slipped 2.7% to $0.73 after accounting for currency swings. This gap shows why it’s smart for investors to dig deeper than the headline numbers. The core business is still growing, but profits are feeling the squeeze.
Read about MDLZ’s moat here: Is Mondelez’s Snack Empire Building a Wider Moat?
Dividend Sustainability: Cash Flow Is the Key Test
In July 2026, Mondelez International, Inc. increased its quarterly dividend by 4% to $0.52 per share. That works out to $2.08 a year in dividends. With a forward yield of 3.38%, shareholders are getting more income now than the five-year average of 2.48%. Check other beverage dividend stocks with higher yields here.
MDLZ’s payout ratio of 73.53% gives Mondelez some room to reinvest in the business, but it isn’t particularly cautious. It’s worth paying close attention to cash flow. In the first half of 2026, operating cash flow came in at $1.32 billion, and free cash flow was $668 million, down from $818 million the year before. Management is aiming for about $3 billion in free cash flow for the full year, which would be enough to support the dividend if they get there. But if commodity prices stay high or demand slows down, that margin for safety could shrink.
Also Read: 14 Best Blue Chip Dividend Stocks to Buy According to Hedge Funds
Is Mondelez’s Valuation Justified by Expected Growth?
Mondelez trades at a forward P/E of 18.18, compared to a trailing P/E of 22.37. The forward number is lower because analysts think future earnings will rebound from the weaker results of the past year. Based on these estimates, the forward earnings yield is about 5.5%.
That 5.5% yield is just a bit higher than the 10-year U.S. Treasury yield, which was 5.27% in early October 2026. Unlike Treasury bonds, though, company earnings aren’t guaranteed. Unless Mondelez can boost earnings and keep growing its dividend, the extra reward for taking on stock risk isn’t especially large.
Compared to similar companies, Mondelez doesn’t look like a clear bargain. Hershey trades at a forward P/E of 17.76 and PepsiCo at 14.86, based on Yahoo Finance data. Mondelez’s forward multiple has come down from 22.32 in June 2025 to 18.18 now, but it’s still a bit above where it was at the end of 2025.
Conclusion
Mondelez’s dividend seems solid as long as management can hit their $3 billion free cash flow goal and get earnings growing again. The 3.38% yield and strong brand lineup offer solid income potential, but with a payout ratio above 70% and Treasury yields still high, there’s not a lot of room for things to go wrong. It makes sense for investors to wait for clear signs of steady cash flow before jumping in just because the forward P/E has fallen.
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This article is originally published at Insider Monkey.
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