Further, the company is seeking to expand its five core global brands in international markets. However, cocoa processors have been hit by weak prices for cocoa ingredients such as cocoa butter, liquor and powder. Recently, Archer Daniels Midland Company (NYSE:ADM) announced plans to sell its cocoa unit, which is worth $2 billion. Hershey Co (NYSE:HSY), on the other hand, launched CocoaLink mobile technology to help farmers in producing greater quantities and a higher quality of cocoa. With a strong product portfolio and a solid financial situation, the company can certainly be a good long-term purchase.
Kellogg Company (NYSE:K) manufactures and markets ready-to-eat cereal and convenience foods. Its solid brand portfolio and global exposure continue generating solid returns for shareholders. The company offers a delightful dividend yield of 2.7%. Along with solid dividends, the company’s price increased by nearly 30% over the past year.
Kellogg has a strong financial position to sustain returns. At the end of the recent quarter, it showed comparable revenue growth in many regions all over the world. With solid results from the Pringles’ business, Kellogg has been able to increase revenue by 12%.
Kellogg Company (NYSE:K)’s management has shown smart moves in the recent past to enhance growth and reduce debt. The management suspended its buyback program to finance the Pringles’ acquisition to confirm future growth while using the remaining funds for debt reduction. This purchase led the company to grow its top line by 12%. The Pringles purchase also helps it to capture the snack food market and confirms strong future growth.
Secondly, Kellogg’s management suspended its buyback program for debt reduction. At the moment, it has an extremely high debt-to-equity ratio of 2.4. However, its current ratio of slightly less than 1.0 suggests that it has sufficient funds to pay current liabilities. On the whole, its business segments are generating increasing sales and earnings. It is on track to achieve 8% growth in 2013 with EPS growth of 5% to 7%.
In conclusion
I believe Mondelez International Inc (NASDAQ:MDLZ) current organic revenue growth of 3.8% symbolizes its ability to achieve its target of 5% to 7% organic growth. Its 9.3% increase in revenue from emerging markets is encouraging. The company is generating double-digit gains in China, Brazil, and India and continues to see improvement in Russia. Mondelez is well positioned to generate solid returns for investors with a focus on emerging markets and margin expansion.
The article Can Mondelez Win Its Bet on Emerging Markets? originally appeared on Fool.com and is written by siraj sarwar.
siraj sarwar has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. siraj is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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