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What’s Mondelez’s Increased Dividend for 2016?

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Increased dividend

A week before its 2Q16 results, Mondelez International (MDLZ) declared a 12% increase in its quarterly dividend. The company targets a dividend payout of 30% in 2016. The increased quarterly dividend of $0.19 per share of Class A common stock will be paid on October 13, 2016, to shareholders of record on September 30, 2016.

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Returns to shareholders to date

In 1H16, Mondelez has returned more than $1.8 billion to shareholders through dividends and share repurchases. Mondelez paid a total of $537 million in dividends alone for the first six months of 2016. In 2015, it paid $1 billion in dividends.

Over the last three years, the company has returned $13 billion in capital to shareholders. This includes ~$3 billion in dividends and more than $8 billion in share repurchases. Mondelez has a dividend yield of 1.6% as of July 19, 2016. The company’s management decreased its dividend at a CAGR (compound annual growth rate) of 15% over the last five years.

Share repurchases

The company purchased $1.3 billion of its stock at an average price of about $41.07 for the first six months of 2016. The company still expects to buy back ~$2 billion of shares in fiscal 2016. In 2015, it bought back $3.6 billion of stock—this is ~92 million shares at an average price of $39.43 per share.

Peers’ dividend yields

Mondelez’s peers in the industry include Hershey (HSY), J.M. Smucker (SJM), and Kellogg (K). As of July 27, their dividend yields are as follows:

  • Hershey – 2.1%
  • J.M. Smucker – 1.9%
  • Kellogg’s – 2.4%

The iShares S&P Global Consumer Staples ETF (KXI) invests 1.9% of its portfolio in Mondelez. The PowerShares QQQ Trust (QQQ) invests 1.3% of its holdings in Mondelez.

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