S&P 500   3,825.33
DOW   31,097.26
QQQ   282.13
S&P 500   3,825.33
DOW   31,097.26
QQQ   282.13
S&P 500   3,825.33
DOW   31,097.26
QQQ   282.13
S&P 500   3,825.33
DOW   31,097.26
QQQ   282.13

7 Reasons To Go Long Kraft Heinz Now

Wednesday, September 29, 2021 | Thomas Hughes
7 Reasons To Go Long Kraft Heinz Now

Kraft Heinz Is A Tasty Treat For Dividend Growth Investors 

We've been interested in The Kraft Heinz Company (NASDAQ: KHC) for several years now and it looks like another great time to buy some shares. We've compiled a list of 7 factors that make this stock a highly attractive target now and for years into the future. If you're looking for a deep value, high-yield stock on the cusp of years of growth and dividend growth, Kraft Heinz is a great choice.

#1 & #2 Kraft Heinz Is A deep Value And High Yield 

Marketbeat.com data reveals Kraft Heinz is trading at a deep value relative to its peers and the broad market. Shares of Kraft Heinz are trading at 14X this year's and next year's earnings consensus which compares to roughly 21x for the broad market S&P 500 and as much as 29x for the most highly valued Consumer Staples in the group.  Hershey is trading at 25X its earnings as is Hormel while McCormick trades at 27X its earnings and Clorox at 29X.

In regards to the yield, Kraft Heinz is among the highest yielding stocks in the group as well as being among the best values. Shares of KHC yield about 4.35% compared to the 1.28% average for the S&P 500 and a range of 1.6% to 2.8% for most of its peers. General Mills is yielding about 3.4% but even it trades at a slightly higher valuation than Kraft Heinz. 

#3 & #4 Kraft Heinz Is Emerging From Turn-Around And Ready To Grow

Kraft Heinz has been working hard for the past several years to streamline its portfolio, trim underperforming assets, improve the balance sheet, and position itself for growth. Those efforts have been paying off and have the company poised for core growth in its continuing operations and new acquisitions. Evidence of this work lies in the recent acquisition of Brazilian company Hemmer. Hemmer is a sauce and condiments company that will help Kraft Heinz not only expand into a very large market but gain a strong foothold in Latin America. The balance sheet it's still carrying quite a bit of debt but the financial trend is positive, cash levels remain high, and coverage is positive. The debt levels may not come down much over the next few quarters due to acquisitions but ultimately, this will lead to enhanced revenue and earnings growth down the road.

#5  Kraft Heinz Clears A Legal Hurdle

The SEC came to a settlement with Kraft Heinz over alleged wrongdoings by two of its former executives. The executives were charged with a long-running scheme that eventually led to a restatement of earnings. That restatement of earnings sparked a massive decline in share prices that helped to set up the opportunity facing us today. Without admitting any wrongdoing, Kraft Heinz settled the case with a $62 million civil penalty that we view as a pittance.  A lawsuit related to the stock drop brought on by shareholders was dismissed as well.

#6 Kraft Heinz Has Dividend Growth In Its Outlook

The outlook is still a little hazy but we believe Kraft Heinz has dividend growth in its outlook. It may take several quarters to a few years before we see one, but the company is on track for improved profitability that supports the idea of both balance sheet improvement and dividend increases. Although it has been a few years since the last increase, and Kraft Heinz made a cut since then, the company is ultimately a dividend grower like most of its peers. We fully expect that when the board feels the time is right this company will hike its payout.

#7  The Technical Outlook: Kraft Heinz Is In A Major Reversal

The Kraft Heinz story is all the sweeter because the technical outlook matches the fundamental outlook. The company is emerging from a dark time stronger than before and ready to grow again and that can be seen in the charts. The market capitulated in 2019 when financials were restated, price action has since formed a bottom and reversed and is now retesting support near the $35 to $36 level. Based on the outlook, we see the stock trading sideways at a minimum but ultimately moving higher. The company is scheduled to report earnings on October 29th and that could be the catalyst to really get it moving higher. Either way, in our view, based on the value, the dividend, the turnaround, and the outlook for growth we see this stock moving up by triple digits and possibly cross the 200% market over the next one to two years. 

Seven (7) Reasons To Go Long Kraft Heinz Now

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Kraft Heinz (KHC)
1.6307 of 5 stars
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in Kraft Heinz right now?

Before you consider Kraft Heinz, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Kraft Heinz wasn't on the list.

While Kraft Heinz currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here

Free Email Newsletter

Complete the form below to receive the latest headlines and analysts' recommendations for your stocks with our free daily email newsletter:

Most Read This Week

Recent Articles

Search Headlines:

Latest PodcastSpot Opportunities Even When Disaster Strikes

Today Kate sits down with repeat guest Andrew Chanin, Co-Founder and CEO of ETF manager ProcureAM. Andrew shares the story behind the launch of the Procure Disaster Recovery Strategy ETF (FEMA).

MarketBeat Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau MarketBeat is rated as Great on TrustPilot

© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at contact@marketbeat.com | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information | RSS Feeds

© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.