Kraft Spin-Off Mondelez Starts Trading Today

by Alyssa Oursler | October 2, 2012 9:16 am

Want to invest in brands like Cadbury and Oreos? Well, starting today, that means jumping on board Mondelez International (NASDAQ:MDLZ[1]) — not Kraft Food Group (NASDAQ:KRFT[2]).

Yes, it’s now official. Mondelez has split from its parent company after more than a year of planning, and began trading this morning.

Kraft will consist of the North American grocery business, leaving Mondelez the snack side of the business — and making it the world’s biggest chocolate, candy and biscuit maker. It has annual revenue of around $36 billion.

Many analysts are bullish on the stock, with Bloomberg reporting[3] predictions of consistent double-digit growth.

Investors may be wary, though, because more than a third of the company’s annual revenue comes from Europe — a region with its share of challenges. Plus, Kraft already warned that Mondelez’s earnings will be hurt by currency exchange[4] in the coming year.

If investors want stability, though, they can simply hit up the Kraft side of things, as the now-grocery stock offers a steady dividend yielding around 4.5%.

The parent company was recently booted from the Dow after under four years because the spin-off left it with a smaller market cap and lower revenue from the U.S. Health care stock United Health (NYSE:UNH[5]) slid into its spot[6] in the index.

As of this writing, Alyssa Oursler did not own a position in any of the aforementioned securities.

Endnotes:
  1. MDLZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=MDLZ
  2. KRFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=KRFT
  3. Bloomberg reporting: http://www.businessweek.com/articles/2012-10-01/mondel-z-splits-from-kraft-with-a-symbol-that-goes-missing
  4. hurt by currency exchange: http://investorplace.com/2012/09/kraft-warns-on-2013-snack-business-outlook/
  5. UNH: http://studio-5.financialcontent.com/investplace/quote?Symbol=UNH
  6. slid into its spot: http://investorplace.com/2012/09/dow-jones-kraft-out-unitedhealth-in-kft-unh/

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