Seven examples of spinoff success

Article Excerpt

From time to time, companies set up their subsidiaries as stand-alone companies and hand out shares in these new businesses as a special dividend. Studies have shown that these new firms, called spinoffs, and their former parents tend to outperform groups of comparable stocks for several years. Here are seven of our recommendations that have either been spun off or are about to set up some of their operations as a separate firm. All of these stocks have done well. That’s not surprising, since the spinoffs have come from well-managed parent companies with long histories of rising profits. MONDELEZ INTERNATIONAL INC. $37 (Nasdaq symbol MDLZ; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.7 billion; Market cap: $62.9 billion; Price-to-sales ratio: 1.9; Dividend yield: 1.5%; TSINetwork Rating: Above Average; www.mondelezinternational.com) took its current form on October 1, 2012, when the old Kraft Foods Inc. broke itself into two publicly traded companies: Mondelez International and Kraft Foods Group. Mondelez makes cookies and…

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