Kraft Heinz In Recovery

This week I'm seeking a prestigious and long-term dividend-paying stock from the consumer defensive sector. 

That defensive sector includes thirteen industries all related to providing those convenient packaged goods we've just gotta have. Industries like: beverages, brewed, soft, or distilled; confections; discount stores; education & training; farm products; food distribution; grocery stores; household & personal products; packaged goods; pharmaceutical retailers; tobacco.

Today I'm reviewing a large-cap packaged foods firm named Kraft Heinz Company Its trading ticker symbol is KHC

The Kraft Heinz Co is a food and beverage company. It manufactures and markets food and beverage products, including condiments and sauces, cheese and dairy, meals, meat, refreshment beverages, and other grocery products in the United States, Canada, Europe, and internationally.

The company offers its products under the Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Planters, Maxwell House, Capri Sun, Ore-Ida, Kool-Aid, Jell-O, Cracker Barrel, P'Tit Cheese, Tassimo, Classico, Plasmon, Pudliszki, Honig, HP, Benedicta, ABC, Master, Quero, Golden Circle, Wattie's, Glucon D, and Complan brand names.

It sells its products through its own sales organizations, as well as through independent brokers, agents, and distributors. 

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.

I use three key data points to gauge the value of any dividend equity or fund like Kraft Heinz Company: 

(1) Price

(2) Dividends

(3) Returns

Besides those three, four more keys  will finally unlock an equity or fund in which to invest.

But those first three primary keys, best tell whether a company has made, is making, and will make money. 

KHC Price

Kraft Heinz's price per share was $57.12 at Friday's market close. A year ago its price was $77.52 for a loss of $20.40 per share.  

Assuming Kraft Heinz's price will trade in the range of $50 to $85 next year, Kraft Heinz's current $57.12 price could recover half its past year losses and grow $10.20 to $67.32 by late-September, 2019. 

KHC Dividends

Kraft Heinz's most recent quarterly dividend was $0.625 declared August 3rd and paid September 14th. That dividend was last increased from $0.60 in August 2017.

At this most recent $0.625 quarterly pay rate, Kraft Heinz's annual dividend is calculated at $2.50 yielding 4.3% at Friday's closing $57.12 price.

Gains For KHC?

Adding the $2.50 estimated annual dividend to my half-recovering $10.20 upside for Kraft Heinz makes a $14.70 gross annual per share gain, which is reduced by the costs to trade the shares.  

 A little over $1,000.00 invested today at the $57.12 recent price buys 18 Kraft Heinz Company shares. 

A $10 broker fee paid half at purchase and half at sale costs $0.56 per share

Subtracting that $0.56 brokerage cost from the estimated $14.70 gross gain leaves a net gain of $14.14 X 18 shares 

= $254.52

or about a 25.5% net gain on a $1,028.16 investment.

Therefore, Kraft Heinz Company whose trading ticker symbol is KHC, now shows a possible 25.5% net gain including a 4.3% dividend yield. 

Twenty-three brokers cover this stock:

Ten say "buy" KHC.

Four say KHC will "outperform" its peers.

Six say KHC is a stock to "hold".

Two says KHC will "underperform".

One says "sell' the stock.

Thus, the analyst consensus recommendation number is 2.1 or "outperform".

The median price target set by those thirty brokers is $0.86 over my half-recovering estimate of $67.32 price target for KHC. 

So, you could look at all these speculative numbers this way, Kraft Heinz Company, whose trading ticker symbol is KHC, has made money, is making money, and could net a 25.5% net annual gain including a 4.3% dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. Actual results remain to be seen. Those results will determine if Kraft Heinz Company is worth your time and money.

Disclaimer: 

This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

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