uploads///KHC EPS

KHC Stock: Low Valuation, Solid Dividend Yield


Dec. 26 2018, Updated 1:05 p.m. ET

Kraft Heinz’s valuation and dividend yield

As of December 24, Kraft Heinz (KHC) stock had fallen 45.3% year-to-date, dragged down by the company’s soft sales and weak profit margins. KHC stock now looks attractive—it is trading at a forward PE ratio of 11.5x, ~41% lower than its historical average of 19.5x, and its dividend yield is impressive, at 6%.

Whereas we expect Kraft Heinz’s sales to benefit from its improved volumes and acquisitions, promotions and inflation in the meat, dairy, and nut categories could restrict top-line growth. Kraft Heinz’s profit margins have disappointed, and its EPS fell YoY (year-over-year) in its last reported quarter. Although lower pricing and cost headwinds are affecting the company’s profitability, management expects its earnings to return to growth. Wall Street expects Kraft Heinz’s top and bottom lines to improve YoY in future quarters, but for its growth to stay low.

Article continues below advertisement

Wall Street’s recommendations

Of the 23 analysts covering Kraft Heinz stock, 14 recommend “buy,” five recommend “sell,” and four recommend “hold.” Their consensus target price of $59.82 for KHC implies a 40.6% upside to its December 24 closing price of $42.54.


More From Market Realist

  • People looking at data on a laptop
    Is Driven Brands (DRVN) a Good Stock to Buy? A Look at the Year Ahead
  • A Moscow Mule drink made with Reed's
    Is Reed's (REED) a Good Stock to Buy? A Look at the Year Ahead
  • Woman using a laptop
    How Taxes on Inherited Stocks Work, Potential Changes
  • Chlorine products
    Why There's a Chlorine Shortage in 2021 and What It Means
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.