Kraft (KFT) Shareholders Warm Up to Mondelez (MDLZV) and New Kraft (KRFTV)
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With Kraft's (Nasdaq: KFT) long anticipates spinoff upon us, investors are repositioning to take advantage of the two distinct businesses. As a review, Kraft’s spinoff separated Kraft into old Kraft, or Mondelez (Nasdaq: MDLZV) (Nasdaq: MDLZ), and new Kraft Food Group (Nasdaq: KRFTV) (Nasdaq: KRFT). Each Kraft holders received one share of Mondelez and a 1/3rd share of new Kraft.
Mondelez International holds the company's global snacks business, including Nabisco cookies, Cadbury chocolate, and Chiclets gum.
New Kraft's portfolio includes products like Jell-O, Kool-Aid, Velveeta, Planters, Oscar Mayer, Kraft macaroni and cheese, and Kraft refrigerated cheeses.
Of the two companies, Mondelez is considered to be the higher growth stock, while New Kraft is valued for solid brands and a stable dividend of 4.5 percent.
New Kraft will likely have one of the highest valuations in the food group, noted a recent report by Barron's. At 17 times projected FY13 profits, it is higher than similar companies Campbell Soup (NYSE: CPB), Kellogg (NYSE: K), Heinz (NYSE: HNZ), and General Mills (NYSE: GIS), which trade at 14 to 16 times earnings.
For this reason, Barron's says Mondelez looks more appealing than new Kraft, as it could be a growth-oriented alternative to PepsiCo (NYSE: PEP), Coca-Cola (NSYE: KO), and Colgate (NYSE: CL).
Today Mondelez traded higher at $27.72 a share and new Kraft traded slightly lower at $44.21.
Mondelez International holds the company's global snacks business, including Nabisco cookies, Cadbury chocolate, and Chiclets gum.
New Kraft's portfolio includes products like Jell-O, Kool-Aid, Velveeta, Planters, Oscar Mayer, Kraft macaroni and cheese, and Kraft refrigerated cheeses.
Of the two companies, Mondelez is considered to be the higher growth stock, while New Kraft is valued for solid brands and a stable dividend of 4.5 percent.
New Kraft will likely have one of the highest valuations in the food group, noted a recent report by Barron's. At 17 times projected FY13 profits, it is higher than similar companies Campbell Soup (NYSE: CPB), Kellogg (NYSE: K), Heinz (NYSE: HNZ), and General Mills (NYSE: GIS), which trade at 14 to 16 times earnings.
For this reason, Barron's says Mondelez looks more appealing than new Kraft, as it could be a growth-oriented alternative to PepsiCo (NYSE: PEP), Coca-Cola (NSYE: KO), and Colgate (NYSE: CL).
Today Mondelez traded higher at $27.72 a share and new Kraft traded slightly lower at $44.21.
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