If a Stock Market Crash Comes in November, You'll Still Rest Easy Knowing You Bought This Dividend Stock
This snack maker shouldn't see demand falter during poor economic times.
Even if a market crash occurs in November, investors can feel reassured if they own Mondelez (MDLZ -1.90%). This is due to several factors that make this stock an excellent defensive play during economic distress and a potential market pullback. Mondelez, a global snack company, has a diverse product line under popular brands like Oreo, Ritz, and Cadbury.
With over 150 countries as its market, the company enjoys a strong global presence that helps balance weakness in any specific region. While people's economic situations may worsen, basic food items, including snacks, continue to be in demand, ensuring steady sales growth for Mondelez. The company reported a 2.1% year-over-year increase in adjusted sales during the third quarter, with 1.8 percentage points of that growth stemming from higher volume and changing mix rather than price increases.
Moreover, Mondelez has a solid track record of raising dividends every year since its 2012 spin-off from Kraft Foods. The latest dividend increase, a 4% boost, has raised the quarterly rate from $0.50 to $0.52 per share. This dependable dividend income, coupled with a payout ratio of just 64%, showcases Mondelez's ability to sustain these payments.
Additionally, the company offers a higher dividend yield of 3.2%, significantly surpassing the S&P 500's yield of 1.1%. While no one wishes for a market crash, it's prudent to prepare for such events. By investing now, rational decisions can be made before others panic. For further guidance on making savvy investments, consider The Motley Fool's premium services.
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