Kraft Heinz: Low Growth, High Debt, And A Dull Future (Long-Term Analysis)

(12min)

Summary

  • Kraft Heinz is rated as a STRONG SELL due to stagnant growth, declining revenue, net income, and FCF over the past decade.
  • Despite beating EPS expectations in the latest earnings, revenue, and net income have shown inconsistency and a downward trend over the long term.
  • High debt levels and decreasing FCF limit the company's ability to return value to investors, making long-term dividend-oriented investments unprofitable.
  • The company's intrinsic value calculations indicate it is slightly overvalued, and historical performance suggests long-term investments may be unprofitable.

The Kraft Heinz Canada head office in North York, Toronto.

JHVEPhoto/iStock Editorial via Getty Images

Today, I want to explain why I rate Kraft Heinz (NASDAQ:KHC) as a STRONG SELL. My explanation will be simple, based mainly on fundamentals and the company's intrinsic value. The base point for my argument is that

This article was written by

I am a value dividend investor with an eye for heavy long term compounding. Whenever I see a company that is heavily undervalued with large upside, I always jump in to take my share of the riches. I have been investing since I can remember, specialising in long term growth dividend companies, so that one day I would be able to live off dividends

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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