KRAFT HEINZ CO/THE (KHC)
US5007541064 - Common Stock
We assign a fundamental rating of 4 out of 10 to KHC. KHC was compared to 90 industry peers in the Food Products industry. While KHC is still in line with the averages on profitability rating, there are concerns on its financial health. KHC has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year KHC was profitable.
In the past year KHC had a positive cash flow from operations.
KHC had positive earnings in each of the past 5 years.
In the past 5 years KHC always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of KHC (1.55%) is comparable to the rest of the industry.
With a Return On Equity value of 2.83%, KHC perfoms like the industry average, outperforming 44.94% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 5.22%, KHC is in line with its industry, outperforming 55.06% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for KHC is below the industry average of 8.93%.
The last Return On Invested Capital (5.22%) for KHC is above the 3 year average (4.89%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.55% | ||
| ROE | 2.83% | ||
| ROIC | 5.22% |
ROA(3y)2.28%
ROA(5y)1.82%
ROE(3y)4.22%
ROE(5y)3.43%
ROIC(3y)4.89%
ROIC(5y)4.75%
1.3 Margins
KHC's Profit Margin of 5.24% is fine compared to the rest of the industry. KHC outperforms 69.66% of its industry peers.
In the last couple of years the Profit Margin of KHC has grown nicely.
With an excellent Operating Margin value of 20.41%, KHC belongs to the best of the industry, outperforming 97.75% of the companies in the same industry.
KHC's Operating Margin has declined in the last couple of years.
KHC has a better Gross Margin (34.66%) than 80.90% of its industry peers.
In the last couple of years the Gross Margin of KHC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.41% | ||
| PM (TTM) | 5.24% | ||
| GM | 34.66% |
OM growth 3Y-2.11%
OM growth 5Y-2.9%
PM growth 3Y99.02%
PM growth 5YN/A
GM growth 3Y-1.21%
GM growth 5Y-0.58%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so KHC is destroying value.
The number of shares outstanding for KHC has been reduced compared to 1 year ago.
The number of shares outstanding for KHC remains at a similar level compared to 5 years ago.
Compared to 1 year ago, KHC has about the same debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.07, we must say that KHC is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.07, KHC is doing worse than 70.79% of the companies in the same industry.
KHC has a debt to FCF ratio of 6.69. This is a slightly negative value and a sign of low solvency as KHC would need 6.69 years to pay back of all of its debts.
With a Debt to FCF ratio value of 6.69, KHC perfoms like the industry average, outperforming 59.55% of the companies in the same industry.
A Debt/Equity ratio of 0.40 indicates that KHC is not too dependend on debt financing.
KHC has a Debt to Equity ratio (0.40) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 6.69 | ||
| Altman-Z | 1.07 |
ROIC/WACC0.73
WACC7.11%
2.3 Liquidity
A Current Ratio of 1.06 indicates that KHC should not have too much problems paying its short term obligations.
KHC has a worse Current ratio (1.06) than 73.03% of its industry peers.
KHC has a Quick Ratio of 1.06. This is a bad value and indicates that KHC is not financially healthy enough and could expect problems in meeting its short term obligations.
KHC has a Quick ratio of 0.56. This is in the lower half of the industry: KHC underperforms 67.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
The earnings per share for KHC have decreased by -1.32% in the last year.
KHC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -3.29% yearly.
The Revenue has decreased by -3.80% in the past year.
The Revenue has been growing slightly by 0.28% on average over the past years.
EPS 1Y (TTM)-1.32%
EPS 3Y1.03%
EPS 5Y-3.29%
EPS Q2Q%4.17%
Revenue 1Y (TTM)-3.8%
Revenue growth 3Y0.58%
Revenue growth 5Y0.28%
Sales Q2Q%-2.85%
3.2 Future
The Earnings Per Share is expected to grow by 5.26% on average over the next years.
Based on estimates for the next years, KHC will show a small growth in Revenue. The Revenue will grow by 1.75% on average per year.
EPS Next Y2.25%
EPS Next 2Y2.2%
EPS Next 3Y3.25%
EPS Next 5Y5.26%
Revenue Next Year-2.91%
Revenue Next 2Y-1.23%
Revenue Next 3Y-0.21%
Revenue Next 5Y1.75%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.29, the valuation of KHC can be described as reasonable.
KHC's Price/Earnings ratio is rather cheap when compared to the industry. KHC is cheaper than 91.01% of the companies in the same industry.
KHC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.65.
KHC is valuated reasonably with a Price/Forward Earnings ratio of 9.95.
92.13% of the companies in the same industry are more expensive than KHC, based on the Price/Forward Earnings ratio.
KHC is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.56, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.29 | ||
| Fwd PE | 9.95 |
4.2 Price Multiples
KHC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. KHC is cheaper than 74.16% of the companies in the same industry.
76.40% of the companies in the same industry are more expensive than KHC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.44 | ||
| EV/EBITDA | 8.91 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
KHC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.57
PEG (5Y)N/A
EPS Next 2Y2.2%
EPS Next 3Y3.25%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.03%, KHC is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.80, KHC pays a better dividend. On top of this KHC pays more dividend than 89.89% of the companies listed in the same industry.
KHC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.03% |
5.2 History
The dividend of KHC decreases each year by -9.23%.
KHC has been paying a dividend for at least 10 years, so it has a reliable track record.
KHC has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-9.23%
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
141.82% of the earnings are spent on dividend by KHC. This is not a sustainable payout ratio.
DP141.82%
EPS Next 2Y2.2%
EPS Next 3Y3.25%
KRAFT HEINZ CO/THE
NASDAQ:KHC (11/20/2024, 8:00:02 PM)
Premarket: 30.92 +0.04 (+0.13%)30.88
+0.3 (+0.98%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap37.34B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.03% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.29 | ||
| Fwd PE | 9.95 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)4.57
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.55% | ||
| ROE | 2.83% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 20.41% | ||
| PM (TTM) | 5.24% | ||
| GM | 34.66% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-1.32%
EPS 3Y1.03%
EPS 5Y
EPS Q2Q%
EPS Next Y2.25%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-3.8%
Revenue growth 3Y0.58%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y