Top Ten Global Food and Beverage Stocks

The U.S. food giant Kraft Foods (KFT) has made a £10.2bn bid ($16.7 billion) to acquire Cadbury (CBY), the most famous confectionery company of U.K. The deal values Cadbury share at 745 pence a share. (Note:1 British Pound (£)= 100 pence)

Cadbury’s board quickly rejected the offer saying that saying that the deal undervalues the company. Some of the large shareholders including Legal and General, one of U.K.’s top investment and insurance services company, are backing the board. Shareholders want at least 800 pence a share. Now other companies such as Nestle and Hershey may join the battle for the control of Cadbury. If Kraft is successful with this takeover bid, the global food industry will be changed for ever. So what are the largest food and beverage companies in the world?

The Dow Jones Food & Beverage Titans 30 Index contains the leading companies in the global food and beverage sector. As of August 31, 2009 the index is up 14.38%. Last year when financials were down heavily, this index lost 25.85%. The top 10 components are listed below:

1.Company: Nestle S.A. (NSRGY.PK)
Country: Switzerland
Current Yield: 3.02%

2.Company: Pepsi (PEP)
Country: USA
Average Annual Earnings Growth (5 years): 9.44%

3.Company: Coca-Cola Co. (KO)
Country: USA
Average Annual Earnings Growth (5 years): 7.08%

4.Company: Monsanto Co. (MON)
Country: USA
Current Yield: 1.29%

5.Company: Unilever N.V. (UN)
Country: The Netherlands
Current Yield: 5.11%
Average Annual Earnings Growth (5 years): 11.59%

6.Company: Diageo Plc. (DEO)
Country: USA
Current Yield: 4.57%
Average Annual Earnings Growth (5 years): 3.04%

7.Company: Kraft Foods Inc.
Country: USA
Current Yield: 4.13%
Average Annual Earnings Growth (5 years): (8.94%)

8.Company: Unilever Plc. (UL)
Country: U.K.
Current Yield: 4.56%

9. Company: Danone S.A. (DANOY.PK)
Country: France
Current Yield: 3.13%

10.Company: Anheuser-Busch InBev N.V. (AHBIF.PK)
Country: Belgium
Current Yield: No regular dividends paid

Cadbury’s portfolio includes brands like Bourn Vita, Dairy Milk, Halls, Trident, etc. These brands are highly popular in many emerging countries especially in the former British colonies. Any acquirer of Cadbury is sure to benefit from its brand values.

Comments

[User 422955:]

Were I grading this as an English composition, it would get no more than a B-. It is poorly organized.

The first part concerns the possible takeover of Cadbury. Hunkar then writes: " If Kraft is successful with this takeover bid, the global food industry will be changed for ever."

Is that so? What reason does Hunkar have for making this statement? What does he speculate that such changes will be? Or, if he (as I) have no idea, why doesn't he say so.

Then, the leading 10 food companies are listed. What do they lead in? Market cap? Sales? Are they ranked in some way rather than simply listed. If so, what is the basis for the rankings? The reader is given no context.

Finally, without transition, three short sentences about Cadbury.

On second thought, perhaps B- is too generous.

Sep 09 07:28 PM