On Monday, Kellanova, previously known as Kellogg Company (NYSE:K), announced the finalization of its separation from its North American cereal business, WK Kellogg Co. The newly independent WK Kellogg Co will commence regular trading on the New York Stock Exchange under the ticker symbol KLG. Kellanova will continue to trade on NYSE under the ticker symbol K.
The separation was finalized through a distribution of all shares of WK Kellogg Co to holders of Kellanova common stock on October 2, 2023. For every four shares of Kellanova common stock held at the close of business on the record date of September 21, 2023, Kellanova shareholders received one share of WK Kellogg Co common stock.
Post-separation, WK Kellogg will manage what was originally Kellogg's cereal business. The decision to spin off this business came as cereal sales began to stagnate. Initially, the spinoff was also set to include snack and plant-based food businesses, however, they have remained part of Kellanova.
Kellanova retains an impressive portfolio of iconic brands including Pringles, Cheez-It, Pop-Tarts, Kellogg's Rice Krispies Treats, MorningStar Farms, Incogmeato, Gardenburger, Nutri-Grain, RXBAR, and Eggo. Its international cereal brands such as Kellogg's, Frosties, Zucaritas, Special K, Krave, Miel Pops, Coco Pops, and Crunchy Nut will persist on its products globally.
Current Kellogg CEO Steve Cahillane will continue to manage Kellanova after the spinoff. Rob Dickerson, a Jefferies analyst noted potential risks in the near term due to North America accounting for approximately 50% of pro-forma Kellanova revenues and a sustained decline in U.S. tracked channel retail volumes.
As of Monday morning, Kellanova's stock was down by 11.7%, while WK Kellogg stock was down by 3.8%.
According to InvestingPro data, Kellanova has a market cap of 17.78B USD and a P/E ratio of 20.62. It's worth noting that Kellanova has a history of maintaining dividend payments, having raised its dividend for 18 consecutive years. This information, along with other relevant data, can be found on the InvestingPro platform which offers a wealth of other tips and insights here.
On the other hand, WK Kellogg, despite the recent downturn, is projected to be profitable this year and has a strong management team that has been aggressively buying back shares, as per InvestingPro Tips. The company's revenue growth has been slowing down recently, but it remains a prominent player in the Diversified Telecommunication Services industry. For more insights like these, interested investors can check out the InvestingPro platform here.
For both companies, the upcoming earnings dates are crucial. Kellanova's next earnings date is on November 2, 2023, while WK Kellogg will announce its earnings on November 10, 2023. These dates could bring significant changes to the companies' stock prices and overall financial health.
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