On Tuesday (Oct. 1), food company Kraft Foods completed the spinoff of its North American grocery business and the two newly separate companies began trading independently on Wednesday (Oct. 2):

• Kraft Foods Group (NasdaqGS: KRFT)
• Mondelez International (NasdaqGS: MDLZ)

Kraft Foods Group is the North American grocery business, comprising brands such as:

Kraft cheeses (including Velveeta), Oscar Mayer deli meats, Planters peanuts, Miracle Whip salad dressing, Philadelphia Cream Cheese, Kool-Aid, Jell-O, Maxwell House coffee, Grey Poupon mustard, Cool Whip, and A1 steak sauce

Mondelez is a global snacks and confectionary business, comprising brands such as:

Oreo cookies, Milka and Cadbury chocolates, Trident and Dentene gums, Wheat Thins, Triscuits, Ritz Crackers, Nilla Wafers, Chiclets, Fig Newtons, Certs, Nutter Butter, Tang powdered drinks, and Jacobs coffees (a German brand)

For each share of the old Kraft Foods, shareholders received one share of Mondelez and one-third of a share of Kraft Foods Group. Based on the respective market caps of the two new companies at the close of trading on Oct. 2, Mondelez is the larger company with 65% of the total value, leaving Kraft Foods Group with 35% of the total value. This makes sense since Mondelez is considered the surviving company and Kraft Foods Group is considered the spinoff.

What doesn’t make sense is why the surviving company would abandon the venerable Kraft name and assume a made-up word (pronounced “mon-dah-LEEZ”) that is a combination of two Latin words meaning “world” and “delicious,” respectively. If you mispronounce the last syllable by making it a short “e” sound rather than a long “e”–which most people do when they first read the name–the word suggests “world of lesbians” and also sounds similar to a Russian expression for oral sex. At the very least, why couldn’t the company place an extra “e” either before or after the “z” (i.e., Mondaleez or Mondaleze) to make it more likely that people would pronounce it properly? Sure, I understand that Mondaleez would look a lot like “sleaze” and a word ending in “z” has more–je ne sais quoi, international flair?–but I just think it’s dumb to adopt a name that will not only be mispronounced often, but will have negative connotations when it is invariably mispronounced.

This name change is almost as bad as the ugly name drug companies Ciba-Geigy and Sandoz came up with in 1996 to call their newly merged company: Novartis (NYSE: NVS). Other bad corporate name changes that come to mind include Anderson Consulting becoming Accenture (NYSE: ACN), Philip Morris becoming Altria (NYSE: MO), and Abbott Laboratories (NYSE: ABT) naming its soon-to-split research pharmaceutical company AbbVie. Oh, and I can’t forget to mention the awful names of Exelis (NYSE: XLS) and Xylem (NYSE: XYL), chosen to represent the defense and water businesses, respectively, of ITT after ITT split into 3 parts last year.

Enough about names–which of Kraft’s new children is the better buy? If dividends are your thing, then Kraft Foods Group is for you because it pays a $2.00 annual dividend, which at the current $47.20 stock price equals a yield of 4.2%. By contrast, Mondalez pays only a $0.52 annual dividend equal to a 1.9% yield at its current $28.00 stock price. Kraft Foods CEO Irene Rosenfeld chose to assume the helm at Mondelez rather than Kraft Foods Group, which suggests that Mondelez has the brighter and more exciting future. After all, Rosenfeld presumably had the pick of the litter and chose Mondelez, probably because Mondelez currently receives 44% of its sales from high-growth emerging markets, whereas Kraft Foods Group’s business is limited almost entirely to the slow-growth markets of North America. But Rosenfeld may not be as savvy as her position suggests because in 2010 Warren Buffett called her decisions to buy Cadbury and sell its frozen pizza division “two dumb deals.” Analysts disagree on which stock is a more attractive investment. For example, Barrons thinks Mondelez is the better buy whereas Morningstar thinks the exact opposite, giving Kraft Foods Group the nod.

Credit-rating wise, both Mondelez and Kraft Foods Group receive the same “BBB” investment grade rating from Standard & Poor’s. Kraft’s corporate debt appears to have been fairly distributed between the two siblings, unlike what occurred in the ITT 3-way split where each of the three split-offs received a different credit rating.

As I wrote last year in ITT Splits Into 3 Parts: Which Spin-off is the Best Investment?, often times the more boring company in a corporate split turns out to be the better investment because investors fall victim to the “growth trap” by overpaying for growth. I wagered with Investing Daily readers that Exelis, the slow-growing defense business, would turn out to be a better investment than Xylem, the fast-growing water business. Although a full 12 months has not yet passed, the Kraft situation makes it timely for me to discuss the 11-month comparative performance of the three ITT split-offs:

• ITT: +11.1%

• Exelis: -0.8%

• Xylem: -6.4%

As I predicted, the “sexy” Xylem has been the worst-performing stock of the three. Based on this–as well as my sheer contempt for the Mondelez name–I’m choosing Kraft Foods Group to outperform Mondelez over the next year.

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