28 Jul

What’s Kraft Heinz’s Outlook for 2016?

WRITTEN BY Sushree Mohanty

2016 outlook

Kraft Heinz’s (KHC) management discussed its fiscal 2016 outlook during its last quarter’s earnings call. The company remains on track or ahead in its areas of integration, which are its organization structure, zero-based budgeting, and manufacturing footprint.

A target of $1.5 billion of cost savings net of inflation is estimated to be fully realized by the company in 2017. KHC also projects $1.9 billion worth of pretax profit and loss costs, including $1.1 billion in cash. $1.1 billion worth of capital expenditure is expected from Kraft Heinz’s integration program.

What’s Kraft Heinz’s Outlook for 2016?

The company has an optimistic outlook for the second half of 2016, and it expects to see stronger EPS (earnings per share) and better margins in 2H16. This comes on the back of a good start to 2016 and an expected earnings rise from KHC’s refinancing of its preferred stock in June.

The company continues to lay the groundwork for the white-space expansion of both the Kraft and Heinz brands. This expansion will be in the food service and international channels.

Recent dividend declared

A day after the 1Q16 earnings release, Kraft Heinz declared a regular quarterly dividend of $0.58 per share on its common stock. This dividend was paid on July 8, 2016, to shareholders on record as of May 27, 2016.

Kraft Heinz has a dividend yield of 2.6% as of July 27. The company has paid $1.15 per share in dividends to date in 2016. Kraft Heinz plans to balance deleveraging with a consistent dividend payout.

The company increased its quarterly dividend by 4.5% on November 5 to $0.58 from its prior dividend of $0.55 per share. The first increased dividend was paid on November 20, 2015, to shareholders on record as of November 16, 2015.

Peers’ dividend yields

Below are the dividend yields for Kraft Heinz’s peers as of July 27, 2016:

  • Campbell Soup Company (CPB) has a dividend yield of 1.9%.
  • ConAgra Foods (CAG) has a dividend yield of 2.1%.

The First Trust NASDAQ-100 Ex-Technology Sector ETF (QQXT) and the First Trust NASDAQ-100 Equal Weighted ETF (QQEW) invest 1.5% and 1.0% of their portfolios, respectively, in Kraft Heinz.

We’ll wrap up the series in the next article with Wall Street analysts’ recommendations and target prices for Kraft Heinz.

Latest articles

This year, Pfizer (PFE) stock has fallen 0.34% and Bristol-Myers Squibb (BMY) stock has fallen 6.48%. Both companies are focused on strengthening their position in the high-growth oncology and immunology markets. Let's take a closer look at each.

Walt Disney’s (DIS) latest movie, Toy Story 4, has reportedly broken records in the opening weekend with $118 million in sales. However, the opening weekend collection was behind analysts’ expectations of at least $150 million in the first weekend.

24 Jun

Will Home Depot’s Upward Momentum to Continue?

WRITTEN BY Rajiv Nanjapla

As of June 21, Home Depot (HD) was trading at $209.39, which implies a rise of 9.7% since the announcement of its first-quarter earnings on May 21. Also, the company was trading at a premium of 32.4% from its 52-week low of $158.09 and a discount of 2.8% from its 52-week high of $215.43.

On June 21, Aurora Cannabis (ACB) made an announcement that indicated that it will move towards higher margin vape products. In addition, the company also believes concentrates and edibles will command higher margins. In anticipation of this development, the company announced the expansion of its facility to capitalize on growth related to these segments.

Shares of Mondelēz International (MDLZ) are scaling new heights thanks to its stellar gains so far this year. Mondelēz stock is up 38.0% on a YTD (year-to-date) basis, and it closed at $55.25—just a shade lower than its 52-week high of $55.71—on June 21.

24 Jun

How Long Will Facebook's Libra Fuel Bitcoin Rally?

WRITTEN BY Mayur Sontakke, CFA, FRM

Ever since the news about Facebook’s (FB) cryptocurrency project broke, Bitcoin has rallied on the hope that Facebook’s entry in the space will help make cryptocurrencies mainstream. Facebook’s cryptocurrency will be called Libra and will be governed by an association with 28 founding members across industries.

172.31.38.64