We've been asking ourselves recently if the market has placed a fair valuation on Mondelez International. Let's dive into some of the fundamental values of this large-cap Consumer Staples company to determine if there might be an opportunity here for value-minded investors.
A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:
Mondelez International, Inc., through its subsidiaries, manufactures, markets, and sells snack food and beverage products in the Latin America, North America, Asia, the Middle East, Africa, and Europe. The company belongs to the Consumer Staples sector, which has an average price to earnings (P/E) ratio of 24.36 and an average price to book (P/B) ratio of 4.29. In contrast, Mondelez International has a trailing 12 month P/E ratio of 23.8 and a P/B ratio of 3.41.
Mondelez International's PEG ratio is 2.4, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
EPS Trend Sustained Primarily by Reducing the Number of Shares Outstanding:
| 2018-02-09 | 2019-02-08 | 2020-02-07 | 2021-02-05 | 2022-02-04 | 2023-02-03 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $25,896 | $25,938 | $25,868 | $26,581 | $28,720 | $31,496 |
| Gross Margins | 39.0% | 40.0% | 40.0% | 39.0% | 39.0% | 36.0% |
| Operating Margins | 13% | 13% | 16% | 16% | 17% | 12% |
| Net Margins | 11.0% | 13.0% | 15.0% | 13.0% | 15.0% | 9.0% |
| Net Income (MM) | $2,828 | $3,317 | $3,929 | $3,555 | $4,300 | $2,717 |
| Net Interest Expense (MM) | n/a | n/a | -$456 | -$608 | -$447 | -$423 |
| Depreciation & Amort. (MM) | -$816 | -$811 | -$1,047 | -$1,116 | -$1,113 | -$1,107 |
| Earnings Per Share | $1.85 | $2.23 | $2.69 | $2.47 | $3.06 | $1.92 |
| EPS Growth | n/a | 20.54% | 20.63% | -8.18% | 23.89% | -37.25% |
| Diluted Shares (MM) | 1,531 | 1,486 | 1,458 | 1,441 | 1,405 | 1,413 |
| Free Cash Flow (MM) | $3,538 | $4,645 | $4,808 | $4,827 | $5,106 | $4,814 |
| Capital Expenditures (MM) | -$905 | -$697 | -$843 | -$863 | -$965 | -$906 |
| Net Current Assets (MM) | -$29,363 | -$29,412 | -$29,568 | -$30,177 | -$28,427 | -$34,150 |
| Long Term Debt (MM) | $12,972 | $12,532 | $14,207 | $17,276 | $17,550 | $20,251 |
| Net Debt / EBITDA | 3.95 | 4.19 | 3.38 | 3.12 | 2.67 | 4.29 |
