October 23, 2019
Confectionery companies have experienced, and continue to experience, their fair share of Wall Street mergers, acquisitions, splits, spin-offs, divestitures, & sales activity over the course of their brand lifetime. Gaining access to investing in your sweetest indulgence’s stock may not be so obvious or even possible at all. Which companies allow the public a slice of the pie and which keep recipes a family secret?
American multinational snack and beverage manufacturer, Mondelez International, Inc. (Tii:MDLZ) holds a firm spot on the Fortune 500 year after year and has been a stock staple in many investor portfolios. With almost $26 billion in 2018 revenue, investors can expect a dividend yield of around 2%. Household brand names include Sour Patch Kids, Cadbury, & Toblerone, with many more internationally marketed brands less well known to the American consumer.
A contentious attempt to sell to Mondelez was blocked by the Trust of The Hershey Company (Tii:HSY) in 2016 and continues to remain a confectionery gorilla. With a longstanding history of philanthropy, past collaborations with Mars Incorporated (M&M’s) and testing new frontiers in snacking, Hershey’s is best known for its native brands in addition to Reese, Almond Joy, KitKat, & Whoppers. Like Mondelez, investors in Hershey also appreciate a 2% dividend yield, but are also attracted to the stock's momentum characteristics.
One of the largest, most beloved brands in chocolate and candy, Mars Incorporated, is privately held and has no plans to go public. Over 100 years old with more than $35 billion in annual sales, Mars can be thanked for new and old favorites such as 3 Musketeers, Big Red, Dove, Lifesavers, M&M’s, MilkyWay, Skittles, Snickers, Starburst, & Twix.
When researching how to gain exposure to your favorite brands, you will likely be investing in a company who was acquired, Cadbury, or does the acquiring, Hershey. The timelines below provide reference on how smaller confectionery companies have survived and evolved through the century.
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