NasdaqGS:KHC

Stock Analysis Report

Executive Summary

The Kraft Heinz Company manufactures and markets food and beverage products in the United States, Canada, Europe, the Middle East, and Africa.


Snowflake Analysis

Undervalued with mediocre balance sheet.


Similar Companies

Share Price & News

How has Kraft Heinz's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: KHC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-10.4%

KHC

0.1%

US Food

0.9%

US Market


1 Year Return

-43.7%

KHC

10.1%

US Food

20.0%

US Market

Return vs Industry: KHC underperformed the US Food industry which returned 10.2% over the past year.

Return vs Market: KHC underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

KHCIndustryMarket
7 Day-10.4%0.1%0.9%
30 Day-13.4%-0.7%1.4%
90 Day-13.5%2.9%8.8%
1 Year-40.6%-43.7%13.1%10.1%22.5%20.0%
3 Year-67.9%-71.7%-0.3%-8.3%49.9%40.3%
5 Yearn/a42.8%26.2%73.2%54.1%

Price Volatility Vs. Market

How volatile is Kraft Heinz's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Kraft Heinz undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KHC ($26.88) is trading below our estimate of fair value ($82.77)

Significantly Below Fair Value: KHC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: KHC is good value based on its PE Ratio (17x) compared to the Food industry average (25.5x).

PE vs Market: KHC is good value based on its PE Ratio (17x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: KHC is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: KHC is good value based on its PB Ratio (0.6x) compared to the US Food industry average (2x).


Next Steps

Future Growth

How is Kraft Heinz forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

14.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KHC's forecast earnings growth (14.5% per year) is above the savings rate (1.7%).

Earnings vs Market: KHC's earnings (14.5% per year) are forecast to grow slower than the US market (14.6% per year).

High Growth Earnings: KHC's earnings are forecast to grow, but not significantly.

Revenue vs Market: KHC's revenue (0.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: KHC's revenue (0.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KHC's Return on Equity is forecast to be low in 3 years time (5.9%).


Next Steps

Past Performance

How has Kraft Heinz performed over the past 5 years?

-17.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KHC has a large one-off loss of $1.6B impacting its December 28 2019 financial results.

Growing Profit Margin: KHC became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: KHC has become profitable over the past 5 years, growing earnings by -17% per year.

Accelerating Growth: KHC has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: KHC has become profitable in the last year, making it difficult to compare its past year earnings growth to the Food industry (-6.2%).


Return on Equity

High ROE: KHC's Return on Equity (3.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Kraft Heinz's financial position?


Financial Position Analysis

Short Term Liabilities: KHC's short term assets ($8.1B) exceed its short term liabilities ($7.9B).

Long Term Liabilities: KHC's short term assets ($8.1B) do not cover its long term liabilities ($41.8B).


Debt to Equity History and Analysis

Debt Level: KHC's debt to equity ratio (56.2%) is considered high.

Reducing Debt: KHC's debt to equity ratio has reduced from 85.3% to 56.2% over the past 5 years.

Debt Coverage: KHC's debt is not well covered by operating cash flow (12.2%).

Interest Coverage: KHC's interest payments on its debt are well covered by EBIT (4.2x coverage).


Balance Sheet

Inventory Level: KHC has a low level of unsold assets or inventory.

Debt Coverage by Assets: KHC's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is Kraft Heinz's current dividend yield, its reliability and sustainability?

5.95%

Current Dividend Yield


Upcoming Dividend Payment

TodayFeb 18 2020Ex Dividend DateMar 12 2020Dividend Pay DateMar 27 202015 days from Ex DividendBuy in the next 23 days to receive upcoming dividend

Dividend Yield vs Market

company6.0%marketbottom25%1.4%markettop25%3.7%industryaverage2.7%forecastin3Years6.0%

Current dividend yield vs market & industry

Notable Dividend: KHC's dividend (5.95%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: KHC's dividend (5.95%) is in the top 25% of dividend payers in the US market (3.69%)


Stability and Growth of Payments

Stable Dividend: KHC has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: KHC has only been paying a dividend for 4 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (101%), KHC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KHC's dividends in 3 years are forecast to be covered by earnings (64.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.1yrs

Average management tenure


CEO

Miguel Patricio (53yo)

0.7yrs

Tenure

Mr. Miguel Patricio has been the Chief Executive Officer of The Kraft Heinz Company since June 25, 2019 and has been its Interim President of U.S. Zone sincxe July 1, 2019. Mr. Patricio serves as Chief of  ...


Leadership Team

NamePositionTenureCompensationOwnership
Paulo Luiz Basilio
Global Chief Financial Officer0.4yrsUS$18.85m0.0022% $728.9k
Rashida La Lande
Senior VP2.1yrsUS$5.80mno data
Miguel Patricio
CEO & Interim President of U.S. Zone0.7yrsno data0.064% $21.2m
Joao Araujo
Head of U.S. Operations1.1yrsno data0.00049% $160.9k
Vince Garlati
VP, Principal Accounting Officer & Global Controller1.7yrsno data0.00017% $55.8k
Christopher Jakubik
Head of Global Investor Relations0yrsno datano data
Peter Hall
Vice President of Sales0yrsno datano data
Melissa Werneck
Global Chief People Officer0yrsno datano data
Michael Mullen
Senior Vice President of Corporate Affairs0yrsno datano data
Andy Keatings
Chief Quality Officer0yrsno datano data

1.1yrs

Average Tenure

46yo

Average Age

Experienced Management: KHC's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
John Cahill
Vice Chairman4.6yrsUS$735.05k0.012% $4.0m
John Pope
Independent Director4.6yrsUS$255.05k0.00083% $272.5k
Jorge Paulo Alberto Lemann
Independent Director7.1yrsUS$235.10k0.29% $94.0m
Jeanne Jackson
Independent Director4.6yrsUS$235.05k0.00035% $114.9k
Gregory Abel
Independent Director6.7yrsUS$235.10k0.0024% $794.5k
Alexandre Behring
Independent Chairman6.7yrsUS$395.05k0.0029% $958.7k
Alexandre Van Damme
Independent Director1.8yrsUS$207.55k0.021% $6.9m
George El-Zoghbi
Director2.1yrsUS$17.07m0.0070% $2.3m
Feroz Dewan
Independent Director3.3yrsUS$235.10k0.0012% $407.1k
Joao Castro-Neves
Independent Director0.7yrsno datano data

4.6yrs

Average Tenure

57yo

Average Age

Experienced Board: KHC's board of directors are considered experienced (4.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The Kraft Heinz Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Kraft Heinz Company
  • Ticker: KHC
  • Exchange: NasdaqGS
  • Founded: 1869
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Market Cap: US$32.831b
  • Shares outstanding: 1.22b
  • Website: https://www.kraftheinzcompany.com

Number of Employees


Location

  • The Kraft Heinz Company
  • One PPG Place
  • Pittsburgh
  • Pennsylvania
  • 15222
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KHCNasdaqGS (Nasdaq Global Select)YesNew Common StockUSUSDJul 2015
KHNZXTRA (XETRA Trading Platform)YesNew Common StockDEEURJul 2015
KHC *BMV (Bolsa Mexicana de Valores)YesNew Common StockMXMXNJul 2015
KHNZDB (Deutsche Boerse AG)YesNew Common StockDEEURJul 2015
KHC-UETLX (Eurotlx)YesNew Common StockITEURJul 2015
KHCSWX (SIX Swiss Exchange)YesNew Common StockCHCHFJul 2015
KHCWBAG (Wiener Boerse AG)YesNew Common StockATEURJul 2015
0JRVLSE (London Stock Exchange)YesNew Common StockGBUSDJul 2015
KHCB34BOVESPA (Bolsa de Valores de Sao Paulo)EACH BDR REPR 1 COM USD0.01BRBRLSep 2015

Biography

The Kraft Heinz Company manufactures and markets food and beverage products in the United States, Canada, Europe, the Middle East, and Africa. Its products include condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee, and other grocery products, as well as infant and nutrition products. The company offers its products under the Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Planters, Maxwell House, Capri Sun, Ore-Ida, Kool-Aid, Jell-OY, Cracker Barrel, Classico, McCafe, P’Tit Quebec, Tassimo, Plasmon, Pudliszki, Honig, HP, Benedicta, Karvan Cevitam, ABC, Master, Quero, Golden Circle, Wattie's, Glucon-D, and Complan names. It sells its products through its own sales organizations, as well as through independent brokers, agents, and distributors to convenience stores, drug stores, value stores, bakeries, pharmacies, mass merchants, club stores, foodservice distributors and institutions, including hotels, restaurants, hospitals, health care facilities, and certain government agencies, as well as to chain, wholesale, cooperative, and independent grocery accounts. The company was formerly known as H.J. Heinz Holding Corporation and changed its name to The Kraft Heinz Company in July 2015. The Kraft Heinz Company was founded in 1869 and is headquartered in Pittsburgh, Pennsylvania. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 01:05
End of Day Share Price2020/02/14 00:00
Earnings2019/12/28
Annual Earnings2019/12/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.