AILV - PepsiCo's Frito Lay Vs. Mondelez: Which Offers Better Growth?

• PepsiCo's Frito Lay division and Mondelez are two great and leading snack food companies. Both benefit from powerful demographic trends and attractive economic characteristics.
• Over the last five years, Frito Lay's revenues have out-grown Mondelez's due to the strength of its global brands, portfolio of local brands, and deeper penetration in the emerging markets.
• Mondelez's per-share EBITDA has expanded faster, but it is unclear whether it can continue to grow its margins or buy back shares at the same pace over the longer term.
• Mondelez trades at a lower valuation compared to PepsiCo, but until Mondelez executes on its "Global Brands & Local Jewels" strategy and deepens its distribution in emerging economics, I believe PepsiCo's premium is justified.
• As an investor with a long horizon, I would favor PepsiCo over Mondelez at this time.

For further details see: