Why Mondelez International Is a Top Pick Among Food Manufacturers

On the Jan. 12, 2026, episode of The Morning Filter podcast, Morningstar Chief US Market Strategist David Sekera chose consumer defensive stock Mondelez International MDLZ as one of his stock picks of the week. Here’s an excerpt on why Sekera sees potential in this undervalued stock.

Susan Dziubinski: Mondelez International is one of your stock picks this week. Give us the elevator pitch on it.

David Sekera: I think Mondelez might be a new pick from our analyst team this quarter. It’s a 5-star-rated stock, trades at a 25% discount, has a 3.6% dividend yield. We rate it with a Low Uncertainty and a wide economic moat, the wide economic moat being based on cost advantages and their intangible assets.

Why Mondelez Is a Stock to Buy Today

Dziubinski: Now, it’s been a tough few years for Mondelez’s stock, so why do you think now is the time to buy?

Sekera: Well, and I would note, too, I think it’s actually been a tough couple of years for all of the food manufacturers. And to some degree, all of them have the same kind of pressures. Volumes have been under pressure at the same point in time. Costs have been rising. And they’ve had a very tough time pushing through those price increases with low- and middle-income households being under pressure for multiple years running now from inflation, and wage increases lagging inflation overall.

When we look at Mondelez, our analyst notes, they have very strong brands. In fact, they noticed that 70% of its snack offerings are either holding or gaining market share. So I like to see that. With US markets at all-time highs and valuations as compared to historical norms being at all-time highs, hearing a lot of people talking about wanting to invest in emerging markets. So, I think Mondelez actually kind of gives you a very good blend, if not necessarily the best blend of having exposure to the emerging markets. When I look at these food companies, I think about 40% of their sales are in different emerging markets, whereas most US food companies probably only like 25% to 30%. So I think this is a way to get that exposure to the emerging markets, but still doing it through a US company.

Longer term, management’s looking for mid-single-digit growth. That’s better than what you’re going to see for most of the other more domestic-oriented food companies, who are only looking for low-single-digit growth. Taking a look at our model here, just looking at total revenue on the top line. So we’re looking for five-year compound annual growth of 3.8%, probably half inflation, half new products or organic growth. Looking for gradual margin to normalize over the next three years, getting back to kind of the historical average we’ve seen for the past couple of years. So, between that, we’re looking for a 10% earnings-growth rate between 2026 and 2029. Yet the stock is only trading at 17 times our 2026 earnings estimate.

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