Mondelez International Inc Stock Hold Recommendation Reiterated (MDLZ)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Mondelez International (Nasdaq: MDLZ) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and weak operating cash flow.

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Highlights from the ratings report include:
  • 38.90% is the gross profit margin for MONDELEZ INTERNATIONAL INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.05% trails the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.81, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that MDLZ's debt-to-equity ratio is low, the quick ratio, which is currently 0.69, displays a potential problem in covering short-term cash needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.19%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 30.76% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • Net operating cash flow has decreased to $967.00 million or 29.36% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

Mondelez International, Inc., together with its subsidiaries, manufactures and markets packaged food products worldwide. Mondelez International has a market cap of $56.5 billion and is part of the consumer goods sector and food & beverage industry. The company has a P/E ratio of 37.00, above the S&P 500 P/E ratio of 18.00. Shares are up 24.5% year to date as of the close of trading on Monday.

You can view the full Mondelez International Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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