Kellogg (NYSE: K) and Kraft Heinz Foods (NYSE:HNZ) are both large-cap non-cyclical consumer goods & services companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitability and earnings.
Kellogg pays an annual dividend of $2.16 per share and has a dividend yield of 3.3%. Kraft Heinz Foods does not pay a dividend. Kellogg pays out 96.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kraft Heinz Foods has raised its dividend for 13 consecutive years.
This is a summary of current recommendations for Kellogg and Kraft Heinz Foods, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Kraft Heinz Foods||0||2||1||0||2.33|
Kellogg presently has a consensus target price of $71.50, suggesting a potential upside of 8.37%. Kraft Heinz Foods has a consensus target price of $17.65, suggesting a potential downside of 75.65%. Given Kellogg’s higher probable upside, equities research analysts clearly believe Kellogg is more favorable than Kraft Heinz Foods.
This table compares Kellogg and Kraft Heinz Foods’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Kraft Heinz Foods||N/A||N/A||N/A|
Insider & Institutional Ownership
89.6% of Kellogg shares are owned by institutional investors. 1.3% of Kellogg shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Kellogg and Kraft Heinz Foods’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kellogg||$13.01 billion||1.75||$694.00 million||$2.24||29.46|
|Kraft Heinz Foods||N/A||N/A||N/A||$3.26||22.24|
Kellogg has higher revenue and earnings than Kraft Heinz Foods. Kraft Heinz Foods is trading at a lower price-to-earnings ratio than Kellogg, indicating that it is currently the more affordable of the two stocks.
Kellogg beats Kraft Heinz Foods on 10 of the 14 factors compared between the two stocks.
Kellogg Company is a manufacturer and marketer of ready-to-eat cereal and convenience foods. The Company’s principal products are ready-to-eat cereals and convenience foods, such as cookies, crackers, savory snacks, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles and veggie foods. Its segments include U.S. Morning Foods, which includes cereal, toaster pastries, health and wellness bars, and beverages; U.S. Snacks, which includes cookies, crackers, cereal bars, savory snacks and fruit-flavored snacks; U.S. Specialty, which represents food away from home channels, including food service, convenience, vending, Girl Scouts and food manufacturing; North America Other, which includes the U.S. Frozen, Kashi and Canada operating segments; Europe, which consists of European countries; Latin America, which consists of Central and South America and includes Mexico, and Asia Pacific, which consists of Sub-Saharan Africa, Australia and other Asian and Pacific markets.
About Kraft Heinz Foods
H. J. Heinz Company, together with its subsidiaries, is engaged in manufacturing and marketing a range of food products throughout the world. The Company’s principal products include ketchup, condiments and sauces, frozen food, soups, beans and pasta meals, infant nutrition and other food products. The Company’s products are manufactured and packaged to provide wholesome foods for consumers, as well as foodservice and institutional customers. The Company manufactures and contracts for the manufacture of its products from a variety of raw food materials. The Company operates in five segments: North American Consumer Products, Europe, Asia/Pacific, U.S. Foodservice and Rest of World. The Company owns or leases office space, warehouses, distribution centers and research and other facilities throughout the world.
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