The Kraft Heinz (KHC) and Its Peers Critical Review

The Kraft Heinz (NASDAQ: KHC) is one of 50 publicly-traded companies in the “Food Processing” industry, but how does it contrast to its competitors? We will compare The Kraft Heinz to related companies based on the strength of its analyst recommendations, valuation, risk, profitability, dividends, institutional ownership and earnings.

Institutional & Insider Ownership

61.8% of The Kraft Heinz shares are held by institutional investors. Comparatively, 63.6% of shares of all “Food Processing” companies are held by institutional investors. 26.9% of The Kraft Heinz shares are held by company insiders. Comparatively, 12.2% of shares of all “Food Processing” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

The Kraft Heinz has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500. Comparatively, The Kraft Heinz’s competitors have a beta of 0.72, indicating that their average stock price is 28% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for The Kraft Heinz and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Kraft Heinz 0 4 9 0 2.69
The Kraft Heinz Competitors 264 1500 1855 53 2.46

The Kraft Heinz presently has a consensus price target of $96.45, indicating a potential upside of 23.44%. As a group, “Food Processing” companies have a potential downside of 1.66%. Given The Kraft Heinz’s stronger consensus rating and higher possible upside, equities analysts clearly believe The Kraft Heinz is more favorable than its competitors.

Profitability

This table compares The Kraft Heinz and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Kraft Heinz 14.67% 7.52% 3.62%
The Kraft Heinz Competitors 4.08% 11.36% 4.77%

Dividends

The Kraft Heinz pays an annual dividend of $2.50 per share and has a dividend yield of 3.2%. The Kraft Heinz pays out 79.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Food Processing” companies pay a dividend yield of 2.6% and pay out 60.1% of their earnings in the form of a dividend.

Earnings & Valuation

This table compares The Kraft Heinz and its competitors revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
The Kraft Heinz $26.17 billion $8.29 billion 24.96
The Kraft Heinz Competitors $8.38 billion $1.05 billion 22.31

The Kraft Heinz has higher revenue and earnings than its competitors. The Kraft Heinz is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Summary

The Kraft Heinz beats its competitors on 8 of the 15 factors compared.

About The Kraft Heinz

The Kraft Heinz Company is a food and beverage company. The Company is engaged in the manufacturing and marketing of food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee and other grocery products. The Company’s segments include the United States, Canada and Europe. The Company’s remaining businesses are combined as Rest of World. The Rest of World consists of Latin America and Asia, Middle East and Africa (AMEA). The Company provides products for various occasions whether at home, in restaurants or on the go. The Company’s brands include Heinz, Kraft, Oscar Mayer, Philadelphia, Planters, Velveeta, Lunchables, Maxwell House, Capri Sun, and Ore-Ida. The Company’s products are sold through its own sales organizations and through independent brokers, agents and distributors to chain, wholesale, cooperative and independent grocery accounts, convenience stores, drug stores, value stores, bakeries and pharmacies.

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