KHC - Kraft Heinz Is Worth Giving Another Look 4.46% Yield With Value To Be Unlocked
2024-03-26 09:00:00 ET
Summary
- Kraft Heinz Company presents a strong value opportunity with suppressed investor sentiment despite improving fundamentals.
- Risks to the investment thesis include ongoing SEC investigation and potential macroeconomic conditions affecting input prices.
- KHC is a large food company operating in over 40 countries, with a guaranteed expansion in its total addressable market as the global population grows. The company has strong financials and fundamentals.
I am always on the hunt for value plays, and after going through the Kraft Heinz Company (KHC) 2023 10-K filing , I am more bullish than I previously was. While technology has led the market higher as artificial intelligence (A.I.) controls the narrative, I believe it's creating an opportunity in the broader market. I invest in all types of companies, but I am especially intrigued when a company's value continues to be suppressed because investor sentiment hasn't changed despite the fundamentals. I'll admit the packaged goods segment isn't as exciting from a headline perspective as cloud technology or A.I., but from a business perspective, it's all about dollars and cents. KHC continues to reduce its total debt , generate billions in profitability , buy back shares, pay a dividend that yields 4.46%, and trade at a discount to book value. Over the past decade, shares of KHC have declined by -35.52% while KHC was left out of the recent rally, with shares retracing -4.58% over the past year. While shares have traded sideways for the past several years, KHC has improved the fundamentals, and I believe this has become a strong value opportunity. I plan to add to my position because paying 11.79 times 2024 earnings with forward growth is an opportunity I don't want to pass up, especially when I am getting paid 4.46% to wait....
Kraft Heinz Is Worth Giving Another Look, 4.46% Yield With Value To Be Unlocked