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Mondelez (MDLZ) Extends Buyback Plan to Boost Shareholder Value
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Mondelez International, Inc. (MDLZ - Free Report) announced an extension of its existing share repurchase program. The company’s board approved an additional $4 million to the existing share repurchase authorization. It has also extended its share repurchase plan for another three years.
Share repurchasing actions are a prudent way of maximizing shareholder’s wealth and thereby generating more value. Although the company suspended its share buybacks plans back in March this year, the recent extension of the buyback authorization restores optimism.
As a result of the extension, the company’s share repurchase program is now valid till Dec 31, 2023. Additionally, the company currently has $6 billion worth shares remaining under its repurchase authorization, including the latest increase of $4 million. Management informed that it may repurchase shares through open market transactions, privately negotiated transactions or a combination of both. Moreover, the company plans to undertake repurchase activities based on its discretion, after considering the market scenario, business condition and other factors.
Along with extending the share repurchase plans, the company announced its quarterly dividend of 31.5 cents per share for its Class A common stock. The dividend is payable on Jan 14, 2021, to shareholders on record as on Dec 31, 2020. Markedly, Mondelez has been actively boosting shareholders value through dividend payouts. During the third quarter of 2020, the company distributed nearly $0.4 billion to shareholders through dividend payouts. Notably, the company has a dividend payout of 46.9%, dividend yield of 2.1% and free cash flow yield of 5.8%.
A strong financial position backed by robust cash flows over the years has enabled Mondelez to support growth initiatives and prudent capital allocation. The company had $2,759 million in cash and cash equivalents at the end of third-quarter 2020. Moreover, it generated cash from operating activities of $2,315 million during nine months ended Sep 30. Free cash flow was $1,685 million during the same time period.
Speaking of growth initiatives, Mondelez has been refreshing its brand portfolio through acquisitions, product innovation and extending its brands to newer geographies and platforms. Additionally, it is increasing investments in in-store execution and advertising to support the Power Brands. Moreover, the company is striving to boost margins through prudent pricing strategies and cost-curtailment efforts. It is also rationalizing SKUs to simplify supply chain as well as lower costs and inventory. Further, the company is on track with its restructuring program, called the Simplify to Grow Program. This program is aimed at reducing Mondelez’s operating costs that includes supply chain and overhead costs.
However, this Zacks Rank #4 (Sell) company is grappling with adverse currency movements. It is also facing soft trends across some of the emerging markets such as Latin America and Middle East, North Africa and parts of Southeast Asia.
Nevertheless, we expect that the aforementioned prudent strategic efforts will cushion the headwinds and help it maintain its position in investors’ good books. Notably, shares of the company have gained 13.4% in the past six months compared with the industry’s rise of 7.5%.
The Hain Celestial Group, Inc. (HAIN - Free Report) , with a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 24.6%, on average.
Conagra Brands Inc. (CAG - Free Report) , also with a Zacks Rank #2, has a long-term earnings growth rate of 7%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Mondelez (MDLZ) Extends Buyback Plan to Boost Shareholder Value
Mondelez International, Inc. (MDLZ - Free Report) announced an extension of its existing share repurchase program. The company’s board approved an additional $4 million to the existing share repurchase authorization. It has also extended its share repurchase plan for another three years.
Share repurchasing actions are a prudent way of maximizing shareholder’s wealth and thereby generating more value. Although the company suspended its share buybacks plans back in March this year, the recent extension of the buyback authorization restores optimism.
As a result of the extension, the company’s share repurchase program is now valid till Dec 31, 2023. Additionally, the company currently has $6 billion worth shares remaining under its repurchase authorization, including the latest increase of $4 million. Management informed that it may repurchase shares through open market transactions, privately negotiated transactions or a combination of both. Moreover, the company plans to undertake repurchase activities based on its discretion, after considering the market scenario, business condition and other factors.
Along with extending the share repurchase plans, the company announced its quarterly dividend of 31.5 cents per share for its Class A common stock. The dividend is payable on Jan 14, 2021, to shareholders on record as on Dec 31, 2020. Markedly, Mondelez has been actively boosting shareholders value through dividend payouts. During the third quarter of 2020, the company distributed nearly $0.4 billion to shareholders through dividend payouts. Notably, the company has a dividend payout of 46.9%, dividend yield of 2.1% and free cash flow yield of 5.8%.
A strong financial position backed by robust cash flows over the years has enabled Mondelez to support growth initiatives and prudent capital allocation. The company had $2,759 million in cash and cash equivalents at the end of third-quarter 2020. Moreover, it generated cash from operating activities of $2,315 million during nine months ended Sep 30. Free cash flow was $1,685 million during the same time period.
Speaking of growth initiatives, Mondelez has been refreshing its brand portfolio through acquisitions, product innovation and extending its brands to newer geographies and platforms. Additionally, it is increasing investments in in-store execution and advertising to support the Power Brands. Moreover, the company is striving to boost margins through prudent pricing strategies and cost-curtailment efforts. It is also rationalizing SKUs to simplify supply chain as well as lower costs and inventory. Further, the company is on track with its restructuring program, called the Simplify to Grow Program. This program is aimed at reducing Mondelez’s operating costs that includes supply chain and overhead costs.
However, this Zacks Rank #4 (Sell) company is grappling with adverse currency movements. It is also facing soft trends across some of the emerging markets such as Latin America and Middle East, North Africa and parts of Southeast Asia.
Nevertheless, we expect that the aforementioned prudent strategic efforts will cushion the headwinds and help it maintain its position in investors’ good books. Notably, shares of the company have gained 13.4% in the past six months compared with the industry’s rise of 7.5%.
Looking for Solid Food Stocks? Check These
United Natural Foods, Inc. (UNFI - Free Report) , which currently sports a Zacks Rank #1 (Strong Buy), has a trailing four-quarter earnings surprise of 4.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Hain Celestial Group, Inc. (HAIN - Free Report) , with a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 24.6%, on average.
Conagra Brands Inc. (CAG - Free Report) , also with a Zacks Rank #2, has a long-term earnings growth rate of 7%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>