We have chosen Mondeléz for our portfolio because it is a well-established, stable business in an industry that is unlikely to see much volatility in its business and share price growth. The company’s three-year daily adjusted beta against the S&P 500 is a mere 0.67, affirming its share price is much less volatile than the market. Although this does not mean that the company is fairly valued, we think it is still undervalued and has value growth to offer, albeit slower and steadier. As such, this stock would be preferable for investors seeking the least amount of risk in active equity markets like the US. The consistency of the company’s performance, coupled with decent tailwinds, could offer investors a fairly decent return in exchange for taking on minimum risk. Chart 1 illustrates the company’s total shareholder returns compared to peers, where it consistently outperformed due to its strong business fundamentals and results, so investors should not view this stock merely as a safe asset to balance out overall portfolio risk and expect minimal returns.
Snacks continue to be a source of comfort as well as excitement and variety for consumers
Nasdaq-listed Mondeléz International is a global F&B company and one of the world’s largest snack companies. The company’s core business is making and selling chocolate, biscuits and baked snacks. Its other businesses include gum & candy, cheese & grocery and powdered beverages. Mondeléz’s portfolio includes popular brands such as Oreo, Ritz, Cadbury Dairy Milk and Toblerone. Mondeléz currently trades at US$73.19 ($98.33) per share, giving it a market cap of US$99 billion.
