Mondelez International (NASDAQ:MDLZ) investors have achieved a notable return of 54% over the past five years

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. Also, you would generally like to see the stock price rise faster than the market. But Mondelez International, Inc. (NASDAQ:MDLZ) fell short of this second goal, with the stock price rising 38% over five years, which is below the market return. Last year was disappointing, with the stock price falling 5.5% during that time.

So let’s assess the underlying fundamentals over the past 5 years and see if they have moved in step with shareholder returns.

Discover our latest analysis for Mondelez International

While markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just underlying trading performance. By comparing earnings per share (EPS) and share price changes over time, we can get an idea of ​​how investors’ attitudes toward a company change over time.

Over five years of share price growth, Mondelez International has achieved compound earnings per share (EPS) growth of 22% per annum. The EPS growth is more impressive than the annual share price gain of 7% over the same period. One could therefore conclude that the broader market has become more cautious towards the stock.

You can see below how the EPS has evolved over time (find out the exact values ​​by clicking on the image).

earnings per share growth

We know that Mondelez International has recently improved its results, but will it increase its income? If you are interested, you can check this free report showing consensus revenue forecasts.

What about dividends?

It is important to consider the total shareholder return, as well as the stock price return, for a given stock. While the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they have been reinvested) and the benefit of any capital raising or spin-offs. off updated. It can be said that the TSR gives a more complete picture of the return generated by a stock. In the case of Mondelez International, it has a TSR of 54% over the last 5 years. This exceeds the performance of its share price that we mentioned earlier. This is largely the result of its dividend payments!

A different perspective

While it was certainly disappointing to see that shares of Mondelez International lost 3.3% throughout the year, it was not as bad as the market’s 16% loss. Of course, the long-term returns are much more important, and the good news is that over five years, the stock has returned 9% for each year. The company may only face short-term problems, but shareholders should keep a close eye on the fundamentals. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. Example: we have identified 3 warning signs for Mondelez International you should be aware.

But note: Mondelez International may not be the best stock to buy. So take a look at this free list of interesting companies with past earnings growth (and new growth forecasts).

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Robert D. Coleman