NasdaqGS:KHC

Stock Analysis Report

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Market Cap

US$45.2b

Last Updated

2021/08/04 23:00 UTC

Data Sources

Company Financials +

Executive Summary

The Kraft Heinz Company, together with its subsidiaries, manufactures and markets food and beverage products in the United States, Canada, the United Kingdom, and internationally. More Details


Snowflake Analysis

Fair value 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 is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: KHC's weekly volatility (2%) has been stable over the past year.


Market Performance


7 Day Return

-5.1%

KHC

-1.0%

US Food

0.9%

US Market


1 Year Return

6.2%

KHC

8.5%

US Food

34.7%

US Market

Return vs Industry: KHC underperformed the US Food industry which returned 8.5% over the past year.

Return vs Market: KHC underperformed the US Market which returned 34.7% over the past year.


Shareholder returns

KHCIndustryMarket
7 Day-5.1%-1.0%0.9%
30 Day-8.5%-3.0%0.2%
90 Day-14.3%-4.3%4.7%
1 Year10.8%6.2%11.1%8.5%36.8%34.7%
3 Year-28.9%-38.7%24.7%14.7%62.5%52.4%
5 Year-48.9%-58.7%13.0%-2.6%123.1%98.4%

Long-Term 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 ($36.94) is trading below our estimate of fair value ($83.1)

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


Price To Earnings Ratio

PE vs Industry: KHC is poor value based on its PE Ratio (83.5x) compared to the US Food industry average (21.2x).

PE vs Market: KHC is poor value based on its PE Ratio (83.5x) compared to the US market (18x).


Price to Earnings Growth Ratio

PEG Ratio: KHC is poor value based on its PEG Ratio (6.2x)


Price to Book Ratio

PB vs Industry: KHC is good value based on its PB Ratio (0.9x) compared to the US Food industry average (2.2x).


Future Growth

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

13.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KHC's forecast earnings growth (13.6% per year) is above the savings rate (2%).

Earnings vs Market: KHC's earnings (13.6% per year) are forecast to grow slower than the US market (14.9% per year).

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

Revenue vs Market: KHC's revenue is expected to decline over the next 3 years (-0.3% per year).

High Growth Revenue: KHC's revenue is forecast to decline over the next 3 years (-0.3% 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 (6.5%).


Past Performance

How has Kraft Heinz performed over the past 5 years?

-26.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KHC has a large one-off loss of $3.5B impacting its March 27 2021 financial results.

Growing Profit Margin: KHC's current net profit margins (2%) are lower than last year (7.6%).


Past Earnings Growth Analysis

Earnings Trend: KHC's earnings have declined by 26.8% per year over the past 5 years.

Accelerating Growth: KHC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: KHC had negative earnings growth (-71.7%) over the past year, making it difficult to compare to the Food industry average (25.4%).


Return on Equity

High ROE: KHC's Return on Equity (1.1%) is considered low.


Financial Health

How is Kraft Heinz's financial position?


Financial Position Analysis

Short Term Liabilities: KHC's short term assets ($13.1B) exceed its short term liabilities ($7.6B).

Long Term Liabilities: KHC's short term assets ($13.1B) do not cover its long term liabilities ($40.7B).


Debt to Equity History and Analysis

Debt Level: KHC's debt to equity ratio (52.8%) is considered high.

Reducing Debt: KHC's debt to equity ratio has increased from 37.8% to 52.8% over the past 5 years.

Debt Coverage: KHC's debt is well covered by operating cash flow (20.8%).

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


Balance Sheet


Dividend

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

4.33%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: KHC's dividend (4.33%) is higher than the bottom 25% of dividend payers in the US market (1.3%).

High Dividend: KHC's dividend (4.33%) is in the top 25% of dividend payers in the US market (3.54%)


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 6 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (361.8%), 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 (57.8% payout ratio).


Next Steps

Management

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

1.9yrs

Average management tenure


CEO

Miguel Patricio (55 yo)

2.17yrs

Tenure

US$6,140,131

Compensation

Mr. Miguel Patricio has been the Chief Executive Officer of The Kraft Heinz Company since June 25, 2019 and serves as its Director since May 06, 2021 and served as its Interim President of U.S. Zone from J...


CEO Compensation Analysis

Compensation vs Market: Miguel's total compensation ($USD6.14M) is below average for companies of similar size in the US market ($USD11.17M).

Compensation vs Earnings: Insufficient data to compare Miguel's compensation with company performance.


Leadership Team

Experienced Management: KHC's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Members

Experienced Board: KHC's board of directors are not considered experienced ( 1.6 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: KHC insiders have only sold shares 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$45.183b
  • 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


Biography

The Kraft Heinz Company, together with its subsidiaries, manufactures and markets food and beverage products in the United States, Canada, the United Kingdom, and internationally. Its products include cond...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/08/04 23:00
End of Day Share Price2021/08/04 00:00
Earnings2021/03/27
Annual Earnings2020/12/26


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.