NYSE:K

Stock Analysis Report

Executive Summary

Kellogg Company, together with its subsidiaries, manufactures and markets ready-to-eat cereal and convenience foods.


Snowflake Analysis

Established dividend payer and slightly overvalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

5.9%

K

1.8%

US Food

-2.6%

US Market


1 Year Return

11.1%

K

-3.8%

US Food

-13.3%

US Market

Return vs Industry: K exceeded the US Food industry which returned -4% over the past year.

Return vs Market: K exceeded the US Market which returned -15.9% over the past year.


Shareholder returns

KIndustryMarket
7 Day5.9%1.8%-2.6%
30 Day0.5%-6.1%-15.2%
90 Day-7.8%-12.0%-22.2%
1 Year15.4%11.1%-1.3%-3.8%-11.5%-13.3%
3 Year-2.3%-12.0%-10.2%-17.5%13.2%5.7%
5 Year13.7%-3.2%24.6%9.9%31.8%17.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

37.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: K ($63.51) is trading below our estimate of fair value ($101)

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


Price To Earnings Ratio

PE vs Industry: K is poor value based on its PE Ratio (22.6x) compared to the Food industry average (19.7x).

PE vs Market: K is poor value based on its PE Ratio (22.6x) compared to the US market (12.2x).


Price to Earnings Growth Ratio

PEG Ratio: K is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: K is overvalued based on its PB Ratio (7.9x) compared to the US Food industry average (1.7x).


Next Steps

Future Growth

How is Kellogg forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

12.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: K's forecast earnings growth (12.3% per year) is above the savings rate (1.7%).

Earnings vs Market: K's earnings (12.3% per year) are forecast to grow slower than the US market (13.4% per year).

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

Revenue vs Market: K's revenue (0.4% per year) is forecast to grow slower than the US market (7% per year).

High Growth Revenue: K's revenue (0.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: K's Return on Equity is forecast to be very high in 3 years time (40.3%).


Next Steps

Past Performance

How has Kellogg performed over the past 5 years?

19.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: K has high quality earnings.

Growing Profit Margin: K's current net profit margins (7.1%) are lower than last year (9.9%).


Past Earnings Growth Analysis

Earnings Trend: K's earnings have grown by 19.8% per year over the past 5 years.

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

Earnings vs Industry: K had negative earnings growth (-28.4%) over the past year, making it difficult to compare to the Food industry average (0.4%).


Return on Equity

High ROE: Whilst K's Return on Equity (29.48%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Kellogg's financial position?


Financial Position Analysis

Short Term Liabilities: K's short term assets ($3.4B) do not cover its short term liabilities ($4.8B).

Long Term Liabilities: K's short term assets ($3.4B) do not cover its long term liabilities ($9.5B).


Debt to Equity History and Analysis

Debt Level: K's debt to equity ratio (239.4%) is considered high.

Reducing Debt: K's debt to equity ratio has reduced from 256.4% to 239.4% over the past 5 years.

Debt Coverage: K's debt is not well covered by operating cash flow (14.8%).

Interest Coverage: K's interest payments on its debt are well covered by EBIT (6.5x coverage).


Balance Sheet


Next Steps

Dividend

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

3.59%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: K's dividend (3.59%) is higher than the bottom 25% of dividend payers in the US market (2.07%).

High Dividend: K's dividend (3.59%) is low compared to the top 25% of dividend payers in the US market (5.82%).


Stability and Growth of Payments

Stable Dividend: K's dividends per share have been stable in the past 10 years.

Growing Dividend: K's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (80.3%), K's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: K's dividends in 3 years are forecast to be covered by earnings (60.1% payout ratio).


Next Steps

Management

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

3.9yrs

Average management tenure


CEO

Steve Cahillane (54yo)

2.5s

Tenure

US$9,694,223

Compensation

Mr. Steven A. Cahillane, also known as Steve, has been the Chief Executive Officer, President and Director of Kellogg Company since October 2, 2017 and has been its Chairman since March 16, 2018. Mr. Cahil ...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD9.69M) is about average for companies of similar size in the US market ($USD12.04M).

Compensation vs Earnings: Steve's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Steven Cahillane
Chairman2.5yrsUS$9.69m0.015% $3.2m
Amit Banati
Senior VP & CFO0.75yrUS$5.37m0.012% $2.5m
Gary Pilnick
Vice Chairman of Corporate Development4.25yrsUS$4.60m0.017% $3.8m
Alistair Hirst
Senior Vice President of Global Supply Chain8yrsUS$4.08m0.012% $2.6m
Christopher Hood
Senior VP & President of Kellogg North America6.5yrsUS$3.99m0.0080% $1.7m
Kurt Forche
VP, Corporate Controller & Principal Accounting Officer1.67yrsno data0.00035% $76.1k
Lesley Salmon
Senior VP & Chief Information Officer1.17yrsno datano data
John Renwick
Vice President of Investor Relations & Corporate Planning3.92yrsno datano data
Michael Hunter
Vice President of Global Sales4.92yrsno datano data
Melissa Howell
Senior Vice President of Global Human Services3.83yrsno data0.0040% $867.9k

3.9yrs

Average Tenure

54yo

Average Age

Experienced Management: K's management team is considered experienced (3.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Steven Cahillane
Chairman2.5yrsUS$9.69m0.015% $3.2m
Donald Knauss
Lead Independent Directorno dataUS$310.00k0.011% $2.4m
Richard Dreiling
Independent Director3.83yrsUS$260.00k0.0029% $622.1k
James Jenness
Non-Executive Director19.75yrsUS$260.00k0.011% $2.5m
G. Gund
Independent Director5.33yrsUS$275.00kno data
Stephanie Burns
Independent Director6.17yrsUS$280.00k0.0047% $1.0m
Carter Cast
Independent Director2.83yrsUS$260.00k0.0022% $474.2k
Mary Laschinger
Independent Director7.5yrsUS$280.00k0.0059% $1.3m
Carolyn Tastad
Independent Director4.33yrsUS$260.00k0.0033% $711.3k
La Montgomery Tabron
Independent Director6.17yrsUS$275.00kno data

5.3yrs

Average Tenure

58yo

Average Age

Experienced Board: K's board of directors are considered experienced (5.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: K 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

Kellogg Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Kellogg Company
  • Ticker: K
  • Exchange: NYSE
  • Founded: 1906
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Market Cap: US$21.752b
  • Shares outstanding: 342.50m
  • Website: https://www.kelloggcompany.com

Number of Employees


Location

  • Kellogg Company
  • One Kellogg Square
  • Battle Creek
  • Michigan
  • 49016-3599
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
KELXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
KELDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
KSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1968
0R1RLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
KELLWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
K *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
K1EL34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 SHS UNSPONBRBRLJan 2020

Biography

Kellogg Company, together with its subsidiaries, manufactures and markets ready-to-eat cereal and convenience foods. The company operates through four segments: North America, Europe, Latin America, and Asia Middle East Africa. Its principal products include crackers, crisps, savory snacks, toaster pastries, cereal bars, granola bars and bites, ready-to-eat cereals, frozen waffles, veggie foods, and noodles. The company offers its products under the Kellogg’s, Cheez-It, Pringles, Austin, Parati, RXBAR, Kashi, Bear Naked, Eggo, Morningstar Farms, Choco Krispies, Crunchy Nut, Nutri-Grain, Special K, Squares, Zucaritas, Sucrilhos, Pop-Tarts, K-Time, Split Stix, Be Natural, LCMs, Coco Pops, Rice Krispies Squares, Kashi Go, Vector, and Gardenburger brand names. It sells its products to retailers through direct sales forces, as well as brokers and distributors. Kellogg Company was founded in 1906 and is headquartered in Battle Creek, Michigan. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/07 01:38
End of Day Share Price2020/04/06 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.