I like The Hershey Company (NYSE:HSY), as the title of my most recent article on June 3 had the bullish title, “Going Coco For Hershey’s: A Path To Double-Digit Returns For This Dividend Gem.”
As it turns out, I’m not the only one, as one of its biggest competitors is reportedly working on a takeover of the company, capitalizing on its massive footprint in the snack industry, which comes with pricing power and strong brand recognition from Hershey’s, Twizzlers, Reese’s, KitKat, and others.
In this article, I’ll walk you through the details and explain that regardless of what happens with this (potential) M&A deal, Hershey shareholders remain in a fantastic spot.
So, let’s keep this intro short and get right to it!
So Good, Mondelez Wants All Of It, Reportedly
On December 9, Bloomberg reported that Chicago-based Mondelez (NASDAQ:MDLZ) is exploring the takeover of Hershey’s. Mondelez is another consumer staple I like a lot, as I wrote in my most recent article on January 11.
Mondelez, like Hershey, owns top-tier brands that provide it with pricing power (compared to weaker brands) and an international footprint that benefits from elevated demand growth in emerging markets.
However, the stock isn’t doing well this year, as consumer staples are simply unloved. With inflation coming down and the Fed expecting to remain somewhat dovish, money is flowing into areas like “big tech,” leaving low-growth consumer staples in the dust. Meanwhile, the consumer is still very price-sensitive.