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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 5/10

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GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 5/10

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» KHC's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow
Oprt. Cash Flow & Net Income

» Details

Guru Trades

Q1 2016

KHC Guru Trades in Q1 2016

Tom Russo 20,950 sh (New)
Daniel Loeb 500,000 sh (+509.76%)
Caxton Associates 3,196,500 sh (+451.12%)
David Rolfe 4,051,880 sh (+23.53%)
Lee Ainslie 1,648,946 sh (+12.68%)
Ken Fisher 3,218 sh (+7.55%)
John Burbank 93,205 sh (+1.43%)
First Eagle Investment 1,845 sh (unchged)
Caxton Associates 200,000 sh (unchged)
Dodge & Cox 3,946 sh (unchged)
Warren Buffett 325,634,818 sh (unchged)
John Hussman Sold Out
Louis Moore Bacon Sold Out
Andreas Halvorsen Sold Out
Joel Greenblatt Sold Out
Ruane Cunniff 17,301 sh (-0.44%)
Jeff Auxier 13,130 sh (-0.71%)
Mario Gabelli 116,633 sh (-2.21%)
John Griffin 2,260,000 sh (-3.00%)
Murray Stahl 61,439 sh (-6.44%)
George Soros 505,133 sh (-31.84%)
Steven Cohen 318,000 sh (-57.79%)
Jim Simons 63,200 sh (-71.12%)
» More
Q2 2016

KHC Guru Trades in Q2 2016

Diamond Hill Capital 2,446 sh (New)
Louis Moore Bacon 4,243 sh (New)
Joel Greenblatt 133,824 sh (New)
Paul Tudor Jones 2,400 sh (New)
Jim Simons 115,700 sh (+83.07%)
Steven Cohen 431,000 sh (+35.53%)
Caxton Associates 3,627,730 sh (+13.49%)
John Burbank 100,477 sh (+7.80%)
Tom Russo 21,450 sh (+2.39%)
First Eagle Investment 1,845 sh (unchged)
Jeff Auxier 13,130 sh (unchged)
Caxton Associates 200,000 sh (unchged)
Dodge & Cox 3,946 sh (unchged)
John Griffin 2,260,000 sh (unchged)
Warren Buffett 325,634,818 sh (unchged)
Ruane Cunniff Sold Out
Daniel Loeb Sold Out
Murray Stahl 59,622 sh (-2.96%)
Mario Gabelli 112,877 sh (-3.22%)
David Rolfe 3,918,756 sh (-3.29%)
Ken Fisher 2,976 sh (-7.52%)
George Soros 384,133 sh (-23.95%)
Lee Ainslie 22,740 sh (-98.62%)
» More
Q3 2016

KHC Guru Trades in Q3 2016

Paul Tudor Jones 19,150 sh (+697.92%)
John Griffin 2,335,200 sh (+3.33%)
First Eagle Investment 1,845 sh (unchged)
Warren Buffett 325,634,818 sh (unchged)
Dodge & Cox 3,946 sh (unchged)
Tom Russo 21,450 sh (unchged)
Caxton Associates 250,000 sh (unchged)
Jeff Auxier 13,130 sh (unchged)
Diamond Hill Capital Sold Out
Louis Moore Bacon Sold Out
Jim Simons Sold Out
Lee Ainslie Sold Out
John Burbank Sold Out
Mario Gabelli 112,744 sh (-0.12%)
Ken Fisher 2,958 sh (-0.60%)
Murray Stahl 58,515 sh (-1.86%)
Joel Greenblatt 129,862 sh (-2.96%)
David Rolfe 3,591,703 sh (-8.35%)
George Soros 235,733 sh (-38.63%)
Caxton Associates 2,217,530 sh (-38.87%)
Steven Cohen 230,200 sh (-46.59%)
» More
Q4 2016

KHC Guru Trades in Q4 2016

Tom Russo 21,825 sh (+1.75%)
First Eagle Investment 1,845 sh (unchged)
Warren Buffett 325,634,818 sh (unchged)
Caxton Associates 475,000 sh (unchged)
Dodge & Cox 3,946 sh (unchged)
Paul Tudor Jones Sold Out
Joel Greenblatt Sold Out
Mario Gabelli 112,378 sh (-0.32%)
George Soros 230,733 sh (-2.12%)
Ken Fisher 2,881 sh (-2.60%)
Caxton Associates 2,142,530 sh (-3.38%)
David Rolfe 3,465,043 sh (-3.53%)
Murray Stahl 53,062 sh (-9.32%)
John Griffin 1,665,000 sh (-28.70%)
Steven Cohen 118,600 sh (-48.48%)
» More
» Details

Insider Trades

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Business Description

Industry: Consumer Packaged Goods » Packaged Foods    NAICS: 311999    SIC: 2099
Compare:OTCPK:DANOY, NYSE:GIS, NYSE:K, OTCPK:ASBFF, NYSE:HRL, NYSE:CPB, NYSE:CAG, NYSE:MJN, NYSE:SJM, OTCPK:SAPIF, OTCPK:KRYAF, NYSE:MKC.V, OTCPK:AJINY, OTCPK:WHGLY, OTCPK:MEJHY, OTCPK:GRBMF, NYSE:BRFS, OTCPK:JBSAY, NYSE:WWAV, OTCPK:NSRGF » details
Traded in other countries:KHCB34.Brazil, KHNZ.Germany, KRFT.Mexico, KHC.Switzerland, 0R3B.UK,
The Kraft Heinz Co, formerly Kraft Foods Group Inc is a consumer packaged food & beverage company. It manufactures & markets food & beverage products, including cheese, meats, refreshment beverages, packaged dinners, snack nuts, & other grocery products.

The Kraft Heinz Co, formerly Kraft Foods Group Inc was incorporated in Delaware. In March 2012, it redomesticated to Virginia and changed its name from Kraft Foods Global, Inc. to Kraft Foods Group, Inc. On October 1, 2012, Mondelez International, Inc. (Mondelez International, formerly known as Kraft Foods Inc.) spun-off Kraft Foods Group to Mondelez International's shareholders (the Spin-Off). The Company is a consumer packaged food and beverage companies in North America and worldwide. It manufactures and markets food and beverage products, including cheese, meats, refreshment beverages, coffee, packaged dinners, refrigerated meals, snack nuts, dressings, and other grocery products, in the United States and Canada, under a host of iconic brands. Its product categories span breakfast, lunch, and dinner meal occasions. The Company has six reportable segments: Cheese, Refrigerated Meals, Beverages, Meals & Desserts, Enhancers & Snack Nuts, and Canada. Its remaining businesses, including its Foodservice and Exports businesses, are aggregated and disclosed as Other Businesses. The Cheese segment: Kraft and Cracker Barrel natural cheeses; Philadelphia cream cheese; Kraft and Deli Deluxe processed cheese slices; Velveeta and Cheez Whiz processed cheeses; Kraft grated and shredded cheeses; Polly-O and Athenos cheeses; and Breakstone's and Knudsen cottage cheese and sour cream. The Refrigerated Meals segment: Oscar Mayer cold cuts, hot dogs, bacon, and P3 Portable Protein Packs; Lunchables lunch combinations; Claussen pickles; and Boca meat alternatives. The Beverages segment: Maxwell House, Gevalia, and Yuban coffees; Tassimo hot beverage system (under license); Capri Sun (under license) and Kool-Aid packaged juice drinks; Crystal Light, Kool-Aid, and Country Time powdered beverages; and MiO, Crystal Light, and Kool-Aid liquid concentrates. The Meals & Desserts segment: Kraft and Kraft Deluxe macaroni and cheese dinners;Velveeta shells and cheese dinners; JELL-O dry packaged desserts; JELL-O refrigerated gelatin and pudding snacks; Cool Whip whipped topping; Stove Top stuffing mix; Jet-Puffed marshmallows; Velveeta Cheesy Skillets and Taco Bell Home Originals (under license) meal kits; Shake 'N Bake coatings; and Baker's chocolate and baking ingredients. The Enhancers & Snack Nuts segment: Planters nuts and trail mixes; Kraft Mayo and Miracle Whip spoonable dressings; Kraft and Good Seasons salad dressings; A.1. sauce; Kraft and Bull's-Eye barbecue sauces; and Grey Poupon\ premium mustards. The Canada Segment: Canadian brand offerings include Kraft peanut butter and Nabob coffee, as well as products bearing brand names similar to those marketed in the U.S. The Other Business segment: including its Foodservice and Exports businesses, sell branded products including Philadelphia cream cheese,A.1. sauce, and a broad array of Kraft sauces, dressings and cheeses.

Guru Investment Theses on The Kraft Heinz Co

David Rolfe Comments on Kraft Heinz - Jan 16, 2017

Kraft Heinz (NASDAQ:KHC) is a rare example of a company that has issued sizable debt with the goal of increasing sales and earnings - particularly earnings, in the case of Kraft Heinz. The unique, hard-to-copy management style of 3G (entrepreneurial, zero-base budgeting), coupled with low-cost debt, has proven to be quite a powerful combination for driving higher profitability well beyond industry peers.

From David Rolfe (Trades, Portfolio)'s fourth quarter 2016 Wedgewood Partners investor letter.



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David Rolfe Comments on Kraft Heinz Company - Jul 13, 2016

Kraft Heinz Company (NASDAQ:KHC) was a top performer during the quarter. First quarter adjusted EBITDA grew 21% year over year and earnings per share grew 38% year over year, as the Company’s consolidated adjusted EBITDA margins reached 30%, up a staggering 600 basis points from the year ago period. We estimate that these margins are best-in-class for the large-cap food products sub -industry, and nearly twice the median. In our view, the vast majority of large capitalization food product competitors, despite possessing great brands, are improperly incentivized, and are content to generate revenues at the expense of profits and long-term shareholder returns. In contrast, we continue to be impressed by Kraft Heinz’s new management culture, as recently brought to bear by 3G Capital and Berkshire Hathaway, which aggressively aligns management and employee incentives with shareholders. For example, rather than simply cutting overhead costs, the Company is intently focused on eliminating financial promotions for retailers (that frequently resulted in profitless revenues) and then reinvesting the savings into alternative product support, such as new products, form factors, and ad campaigns. We are seeing nascent evidence that this profit-focused strategy can be successfully executed without sacrificing revenue growth, as the Company posted low single-digit constant-currency organic revenue growth. As Kraft Heinz continues its aggressive new approach of reinvestment, we expect organic revenue growth to accelerate, along with continued margin expansion.

From David Rolfe (Trades, Portfolio)'s second quarter 2016 Wedgewood Partners Client Letter.

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David Rolfe Comments on Kraft Heinz Company - Oct 15, 2015

During the quarter we purchased shares of the Kraft Heinz Company (NASDAQ:KHC). Earlier this year, privately -held H.J. Heinz Company acquired publicly traded Kraft Foods in exchange for stock in the combined company and a one-time special dividend. Key to this transaction were the private equity shop 3G Capital, as well as another Focused Growth portfolio holding, Berkshire Hathaway. Prior to the Heinz-Kraft transaction, H.J. Heinz Company’s ownership was held exclusively by 3G Capital and Berkshire Hathaway, after a 2013 deal that took Heinz private. The newly combined Kraft Heinz Company began trading in July, with Berkshire Hathaway and 3G Capital combining to own just over half of the shares of the new Company.

We think Kraft Heinz’s new leadership and culture, as brought to bear by 3G Capital’s rigorous, time-tested methods of recruiting and installing exceptional managerial talent, will be the Company’s primary competitive advantage and means for generating sustainably superior profitability.

While the concept of a private-equity led management team executing a high productivity strategy is hardly revolutionary, we think Kraft Heinz’s approach will be differentiated. First, we expect Kraft Heinz leadership will execute a strategy more consistent with the long-term value-creating goals of a business owner, as opposed to the short-termism seen when owners are motivated by an “exit strategy.” We surmise that a business-owner culture and mentality will be pervasive as KHC is majority owned by 3G Capital and Berkshire Hathaway. For example, Berkshire Hathaway’s Chairman and CEO has explicitly stated “we will be in the stock forever...it’s a permanent holding, on our part…the one thing I can promise you, is that you will not see Berkshire reduce its interest.”2 Further, while Kraft Heinz ownership is yet to be disclosed, 3G Capital’s founding members exhibit similar long-term conviction, consistent with a business owner's mentality. For example, the three founding partners of 3G Capital (two of which are on the KHC board) hold a controlling interest in Anheuser-Busch InBev (ABI), stemming from investments that were made more than a decade ago during the creation of Ambev, now a subsidiary of ABI34. Post-3G Capital’s involvement, ABI now sports the highest margins in the beer industry, while continuing to grow volume at above-industry rates. Far from cutting “muscle and bone,” ABI’s strategy focuses on instilling a culture that blurs the line between employees and business owners. It is this culture of obsessive accountability that we believe, will quickly emerge at Kraft Heinz and lead to superior profits.

Second, we expect the culture shift at the Company will start and be maintained by leadership, particularly the board of directors. Under the new ownership structure, Kraft Heinz’s Board of Directors now consists of: Warren Buffett (Trades, Portfolio) (CEO of Berkshire Hathaway); Greg Abel (Chairman of Berkshire Hathaway Energy); Tracy Britt Cool (CEO of Pampered Chef, a subsidiary of Berkshire Hathaway); Jorge Paulo Lemann (founding member of 3G Capital); Marcel Hermann Telles (founding member of 3G Capital); Alexandre Behring (managing partner from 3G Capital); as well as five board members from the previous Kraft Foods Company. Further, of Kraft Heinz’s announced executive team of 11 senior employees, 9 are from the 3G Capital and Berkshire controlled HJ Heinz. 5

So, to reiterate, we think the culture of business ownership is less about cost cutting and more about maintaining a rigorously competitive, meritocratic organization, with hungry employees - not unlike that of a start -up. Of course, on the face of it, an organization such as Kraft Heinz is about as far from “start-up” as one can imagine, but that is why we think this Company will have a unique advantage, relative to peers.

We expect to see rapid profitability growth over the next few years as 3G Capital instills its highly disciplined culture of minimizing cost and expanding margins at the under-earning Kraft Foods Corp (along with further optimization at Heinz). Once KHC margins have been maximized, we expect KHC to plow that capital back into more M&A and repeat this process with other branded staples that exhibit bloated cost structures. We expect this exceptional compounding of profits will drive exceptional performance at KHC for several years.

From David Rolfe (Trades, Portfolio)'s Wedgewood Partners third quarter 2015 letter.

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Top Ranked Articles about The Kraft Heinz Co

David Rolfe Comments on Kraft Heinz Guru stock highlight
Kraft Heinz (NASDAQ:KHC) is a rare example of a company that has issued sizable debt with the goal of increasing sales and earnings - particularly earnings, in the case of Kraft Heinz. The unique, hard-to-copy management style of 3G (entrepreneurial, zero-base budgeting), coupled with low-cost debt, has proven to be quite a powerful combination for driving higher profitability well beyond industry peers. Read more...
David Rolfe Buys 1, Sells 1 in 3rd Quarter Guru trades one consumer packaged goods company for another
Wedgewood Partners’ David Rolfe (Trades, Portfolio) acquired one new holding and sold another in the third quarter. Read more...
Are Any of Buffett's Holdings Cheap Enough to Buy? Warren Buffett is the world's greatest investor, but is it worth following him into any of his current holdings?
Warren Buffett (Trades, Portfolio) is widely regarded as one of the greatest investors ever. Naturally, with this accolade behind him, investors try and copy his investment portfolio in the hope of replicating his performance. However, unlike other fund managers, Buffett’s holdings change rarely, and his top holdings have been a part of the Berkshire (NYSE:BRK.A)(BRK.B) portfolio for decades. Read more...
How to Find Dividend Stocks With Strong Competitive Advantages Four methods for identifying competitive advantages
Several Companies Reach 52-Week Highs Kraft Heinz, Activision Blizzard, International Paper, Hewlett Packard Enterprise, Pharmacyclics achieve milestones
According to GuruFocus' list, these stocks have reached their 52-week highs. Read more...
Caxton Associates Exits Coca-Cola, Buys Raytheon Fund's largest 2nd quarter trades
Caxton Associates (Trades, Portfolio) LP is a New York-based trading and investment firm. Its primary business is to manage client and proprietary capital through global macro hedge fund strategies. Assets are managed via a broad mandate to trade in a variety of global markets and instruments. During the second quarter, the fund’s most heavily weighted trades were as follows: Read more...
The Lindy Effect: Triumph of the Tried and True Older businesses are more likely to have stable futures
The value of any financial asset is the sum of its future cash flows discounted to present value. Read more...
Bill Gates Trims Stake in Berkshire Hathaway Company's price has risen about 9% over the previous year
Microsoft (NASDAQ:MSFT) co-founder Bill Gates (Trades, Portfolio) and his Bill & Melinda Gates Foundation Trust reduced the stake in Berkshire Hathaway (BRK.B) by 7.21% during the second quarter. Read more...
How to Integrate Multiple Dividend Newsletter Ideas in Your Portfolio Combine ideas from a variety of newsletters
I designed "Sure Dividend" to be an all-in-one dividend growth portfolio solution. That’s what I thought would provide the most value to people. Read more...
David Rolfe Comments on Kraft Heinz Company Guru stock highlight
Kraft Heinz Company (NASDAQ:KHC) was a top performer during the quarter. First quarter adjusted EBITDA grew 21% year over year and earnings per share grew 38% year over year, as the Company’s consolidated adjusted EBITDA margins reached 30%, up a staggering 600 basis points from the year ago period. We estimate that these margins are best-in-class for the large-cap food products sub -industry, and nearly twice the median. In our view, the vast majority of large capitalization food product competitors, despite possessing great brands, are improperly incentivized, and are content to generate revenues at the expense of profits and long-term shareholder returns. In contrast, we continue to be impressed by Kraft Heinz’s new management culture, as recently brought to bear by 3G Capital and Berkshire Hathaway, which aggressively aligns management and employee incentives with shareholders. For example, rather than simply cutting overhead costs, the Company is intently focused on eliminating financial promotions for retailers (that frequently resulted in profitless revenues) Read more...

Ratios

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Dividend & Buy Back

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Dividend Yield 2.47
KHC's Dividend Yield is ranked higher than
67% of the 1559 Companies
in the Global Packaged Foods industry.

( Industry Median: 1.61 vs. KHC: 2.47 )
Ranked among companies with meaningful Dividend Yield only.
KHC' s Dividend Yield Range Over the Past 10 Years
Min: 0  Med: 0 Max: 2.53
Current: 2.47
0
2.53
Dividend Payout 1.12
KHC's Dividend Payout is ranked lower than
60% of the 921 Companies
in the Global Packaged Foods industry.

( Industry Median: 0.36 vs. KHC: 1.12 )
Ranked among companies with meaningful Dividend Payout only.
KHC' s Dividend Payout Range Over the Past 10 Years
Min: 0  Med: 0 Max: 1.12
Current: 1.12
0
1.12
Forward Dividend Yield 2.48
KHC's Forward Dividend Yield is ranked higher than
67% of the 1505 Companies
in the Global Packaged Foods industry.

( Industry Median: 2.00 vs. KHC: 2.48 )
Ranked among companies with meaningful Forward Dividend Yield only.
N/A
Yield on cost (5-Year) 2.47
KHC's Yield on cost (5-Year) is ranked higher than
56% of the 2017 Companies
in the Global Packaged Foods industry.

( Industry Median: 2.35 vs. KHC: 2.47 )
Ranked among companies with meaningful Yield on cost (5-Year) only.
KHC' s Yield on cost (5-Year) Range Over the Past 10 Years
Min: 0  Med: 0 Max: 2.53
Current: 2.47
0
2.53

Valuation & Return

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More Statistics

Revenue (TTM) (Mil) $26,487
EPS (TTM) $ 2.82
Short Percentage of Float1.93%
52-Week Range $71.83 - 97.77
Shares Outstanding (Mil)1,217.27

Analyst Estimate

Dec17 Dec18 Dec19
Revenue (Mil $) 27,047 27,081 27,891
EPS ($) 3.86 4.20 4.35
EPS w/o NRI ($) 3.86 4.20 4.35
EPS Growth Rate
(3Y to 5Y Estimate)
25.70%
Dividends Per Share ($) 2.30 2.58 2.65

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