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The Kraft Heinz Co KHC

Morningstar Rating
$36.90 +0.37 (1.01%)
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Company Report

Kraft Heinz Works to Unearth Inefficiencies to Fund Investments in Its Brands and Capabilities

Kraft Heinz benefited from consumers’ penchant for eating at home during the pandemic, with 85% of its sales driven through the retail channel. But we attribute recent performance to its revamped road map, as evidenced by its share position and recent shelf space gains, rather than being merely a byproduct of the macro and competitive backdrop. Since mid-2019, Kraft Heinz has prioritized the pursuit of efficiencies that prove lasting, brand spending elevation (marketing and product innovation), enhancement of capabilities (category management and e-commerce), and scale leverage to more nimbly respond to changing market conditions, which we perceive as prudent.

Price vs Fair Value

KHC is trading at a 33% discount.
Price
$36.18
Fair Value
$43.00
Uncertainty
Medium
1-Star Price
$29.60
5-Star Price
$92.10
Economic Moat
Vfclm
Capital Allocation
Gqjwwcgmt

Bulls Say, Bears Say

Bulls

Tempered exposure to private label (11% now versus 17% in 2019) and enhanced agility in responding to consumer trends should negate any lasting downdraft in Kraft Heinz's volume.

Bears

Inflation stemming from tomatoes, sugar, wages, and transportation has yet to abate. It's possible Kraft Heinz will eventually struggle to pass the hit on to consumers without a more pronounced contraction in volume.

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News

Trading Information

Previous Close Price
$36.53
Day Range
$36.6536.98
52-Week Range
$30.6841.47
Bid/Ask
$36.90 / $36.98
Market Cap
$44.86 Bil
Volume/Avg
7.2 Mil / 8.3 Mil

Key Statistics

Price/Earnings (Normalized)
12.30
Price/Sales
1.69
Dividend Yield (Trailing)
4.38%
Dividend Yield (Forward)
4.38%
Total Yield
5.40%

Company Profile

In July 2015, Kraft merged with Heinz to create the third-largest food and beverage manufacturer in North America behind PepsiCo and Nestle and the fifth-largest player in the world. Beyond its namesake brands, the combined firm's portfolio includes Oscar Mayer, Velveeta, and Philadelphia. While the retail channel drives around 85% of its total sales, the firm has a growing presence in foodservice. Outside North America, Kraft Heinz's global reach counts a distribution network in Europe and emerging markets that drives 20%-25% of its consolidated sales base, as its products are sold in more than 190 countries and territories.
Sector
Consumer Defensive
Industry
Packaged Foods
Stock Style Box
Mid Value
Total Number of Employees
36,000

Competitors

Valuation

Metric
KHC
CPB
K
Price/Earnings (Normalized)
12.3015.1913.62
Price/Book Value
0.903.416.08
Price/Sales
1.691.431.49
Price/Cash Flow
9.4310.0112.04
Price/Earnings
KHC
CPB
K

Financial Strength

Metric
KHC
CPB
K
Quick Ratio
0.440.390.36
Current Ratio
0.991.010.66
Interest Coverage
4.946.294.10
Quick Ratio
KHC
CPB
K

Profitability

Metric
KHC
CPB
K
Return on Assets (Normalized)
4.06%7.06%7.20%
Return on Equity (Normalized)
7.46%23.13%33.62%
Return on Invested Capital (Normalized)
6.27%11.85%12.68%
Return on Assets
KHC
CPB
K
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