Critical Comparison: Mondelez International (MDLZ) versus Dean Foods (DF)
Mondelez International (NASDAQ: MDLZ) and Dean Foods (NYSE:DF) are both consumer staples companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.
This table compares Mondelez International and Dean Foods’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings and target prices for Mondelez International and Dean Foods, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Mondelez International presently has a consensus target price of $50.50, suggesting a potential upside of 23.29%. Dean Foods has a consensus target price of $14.67, suggesting a potential upside of 30.95%. Given Dean Foods’ higher probable upside, analysts plainly believe Dean Foods is more favorable than Mondelez International.
Insider & Institutional Ownership
75.9% of Mondelez International shares are owned by institutional investors. 3.6% of Mondelez International shares are owned by insiders. Comparatively, 1.2% of Dean Foods shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Mondelez International and Dean Foods’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Mondelez International||$25.57 billion||2.42||$4.37 billion||$1.14||35.93|
|Dean Foods||$7.91 billion||0.13||$376.23 million||$0.60||18.67|
Mondelez International has higher revenue and earnings than Dean Foods. Dean Foods is trading at a lower price-to-earnings ratio than Mondelez International, indicating that it is currently the more affordable of the two stocks.
Mondelez International pays an annual dividend of $0.76 per share and has a dividend yield of 1.9%. Dean Foods pays an annual dividend of $0.36 per share and has a dividend yield of 3.2%. Mondelez International pays out 66.7% of its earnings in the form of a dividend. Dean Foods pays out 60.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Dean Foods is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Mondelez International has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Dean Foods has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500.
Mondelez International beats Dean Foods on 13 of the 17 factors compared between the two stocks.
Mondelez International Company Profile
Mondelez International, Inc. is a snack company. The Company manufactures and markets snack food and beverage products for consumers. It operates through four segments: Latin America, Asia, Middle East, and Africa (AMEA), Europe and North America. As of December 31, 2016, its brands spanned five product categories: Biscuits (including cookies, crackers and salted snacks); Chocolate; Gum and candy; Beverages (including coffee and powdered beverages), and Cheese and grocery. Itsportfolio includes various snack brands, including Nabisco, Oreo, LU and belVita biscuits; Cadbury, Milka, Cadbury Dairy Milk and Toblerone chocolate; Trident gum; Halls candy, and Tang powdered beverages. The Company sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and retail food outlets. As of December 31, 2016, it sold its products to consumers in approximately 165 countries.
Dean Foods Company Profile
Dean Foods Company is a food and beverage company. The Company processes and distributes fluid milk, and other dairy and dairy case products in the United States. It is engaged in manufacturing, marketing, selling and distributing a range of branded and private label dairy and dairy case products. It offers branded and private label dairy case products, including fluid milk, ice cream, cultured dairy products, creamers, ice cream mix and other dairy products to retailers, distributors, foodservice outlets, educational institutions and governmental entities across the United States. It also offers juices, teas and bottled water. As of December 31, 2016, the Company had over 50 national, regional and local dairy brands, as well as private labels. As of December 31, 2016, the Company’s national, local and regional licensed brands included Alta Dena, Hygeia, PET, Arctic Splash, Jilbert, Pog, Barbers Dairy, Purity, Berkeley Farms, Land-O-Sun & design and ReadyLeaf, Broughton.
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