KRAFT HEINZ CO/THE (KHC) Stock Fundamental Analysis
NASDAQ:KHC - Nasdaq - US5007541064 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to KHC. KHC was compared to 89 industry peers in the Food Products industry. KHC scores excellent on profitability, but there are concerns on its financial health. KHC is cheap, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year KHC was profitable.
KHC had a positive operating cash flow in the past year.
In the past 5 years KHC has always been profitable.
In the past 5 years KHC always reported a positive cash flow from operatings.
1.2 Ratios
KHC has a Return On Assets (2.94%) which is comparable to the rest of the industry.
With a Return On Equity value of 5.37%, KHC perfoms like the industry average, outperforming 49.44% of the companies in the same industry.
The Return On Invested Capital of KHC (4.98%) is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for KHC is below the industry average of 7.60%.
The last Return On Invested Capital (4.98%) for KHC is above the 3 year average (4.97%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.94% | ||
| ROE | 5.37% | ||
| ROIC | 4.98% |
ROA(3y)2.96%
ROA(5y)2.06%
ROE(3y)5.4%
ROE(5y)3.79%
ROIC(3y)4.97%
ROIC(5y)4.89%
1.3 Margins
The Profit Margin of KHC (10.44%) is better than 86.52% of its industry peers.
KHC's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 20.76%, KHC belongs to the best of the industry, outperforming 97.75% of the companies in the same industry.
KHC's Operating Margin has been stable in the last couple of years.
KHC's Gross Margin of 34.58% is fine compared to the rest of the industry. KHC outperforms 76.40% of its industry peers.
KHC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.76% | ||
| PM (TTM) | 10.44% | ||
| GM | 34.58% |
OM growth 3Y1.51%
OM growth 5Y0.42%
PM growth 3Y39.8%
PM growth 5Y6.51%
GM growth 3Y1.31%
GM growth 5Y1.14%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), KHC is destroying value.
Compared to 1 year ago, KHC has less shares outstanding
KHC has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, KHC has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.00, we must say that KHC is in the distress zone and has some risk of bankruptcy.
KHC has a Altman-Z score of 1.00. This is in the lower half of the industry: KHC underperforms 69.66% of its industry peers.
KHC has a debt to FCF ratio of 7.14. This is a slightly negative value and a sign of low solvency as KHC would need 7.14 years to pay back of all of its debts.
KHC has a better Debt to FCF ratio (7.14) than 69.66% of its industry peers.
KHC has a Debt/Equity ratio of 0.42. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.42, KHC is in line with its industry, outperforming 51.69% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 7.14 | ||
| Altman-Z | 1 |
ROIC/WACC0.54
WACC9.29%
2.3 Liquidity
A Current Ratio of 1.31 indicates that KHC should not have too much problems paying its short term obligations.
With a Current ratio value of 1.31, KHC perfoms like the industry average, outperforming 40.45% of the companies in the same industry.
KHC has a Quick Ratio of 1.31. 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 (0.81) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.31 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
KHC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.34%.
The Earnings Per Share has been growing slightly by 1.43% on average over the past years.
KHC shows a decrease in Revenue. In the last year, the revenue decreased by -4.25%.
The Revenue has been growing slightly by 0.69% on average over the past years.
EPS 1Y (TTM)0.34%
EPS 3Y1.34%
EPS 5Y1.43%
EPS Q2Q%-10.14%
Revenue 1Y (TTM)-4.25%
Revenue growth 3Y-0.25%
Revenue growth 5Y0.69%
Sales Q2Q%-6.43%
3.2 Future
Based on estimates for the next years, KHC will show a small growth in Earnings Per Share. The EPS will grow by 1.61% on average per year.
KHC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.47% yearly.
EPS Next Y-14.56%
EPS Next 2Y-6.25%
EPS Next 3Y-2.59%
EPS Next 5Y1.61%
Revenue Next Year-3.75%
Revenue Next 2Y-1.56%
Revenue Next 3Y-0.59%
Revenue Next 5Y0.47%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 8.73, which indicates a very decent valuation of KHC.
KHC's Price/Earnings ratio is rather cheap when compared to the industry. KHC is cheaper than 86.52% 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 26.32.
A Price/Forward Earnings ratio of 9.71 indicates a reasonable valuation of KHC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KHC indicates a rather cheap valuation: KHC is cheaper than 88.76% of the companies listed in the same industry.
KHC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.73 | ||
| Fwd PE | 9.71 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KHC is valued a bit cheaper than 71.91% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, KHC is valued cheaper than 85.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.22 | ||
| EV/EBITDA | 7.87 |
4.3 Compensation for Growth
The decent profitability rating of KHC may justify a higher PE ratio.
A cheap valuation may be justified as KHC's earnings are expected to decrease with -2.59% in the coming years.
PEG (NY)N/A
PEG (5Y)6.1
EPS Next 2Y-6.25%
EPS Next 3Y-2.59%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.05%, KHC is a good candidate for dividend investing.
KHC's Dividend Yield is rather good when compared to the industry average which is at 4.45. KHC pays more dividend than 88.76% of the companies in the same industry.
KHC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.05% |
5.2 History
KHC has paid a dividend for at least 10 years, which is a reliable track record.
KHC has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)0%
Div Incr Years0
Div Non Decr Years5
5.3 Sustainability
KHC pays out 72.39% of its income as dividend. This is not a sustainable payout ratio.
DP72.39%
EPS Next 2Y-6.25%
EPS Next 3Y-2.59%
NASDAQ:KHC (6/16/2025, 9:53:07 AM)
26.115
+0.04 (+0.13%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners59.48%
Inst Owner Change-0.47%
Ins Owners0.28%
Ins Owner Change0.06%
Market Cap30.91B
Analysts54.84
Price Target31.2 (19.47%)
Short Float %5.9%
Short Ratio4.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.05% |
Yearly Dividend1.6
Dividend Growth(5Y)0%
DP72.39%
Div Incr Years0
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.36%
Min EPS beat(2)1.8%
Max EPS beat(2)6.92%
EPS beat(4)4
Avg EPS beat(4)3.55%
Min EPS beat(4)0.43%
Max EPS beat(4)6.92%
EPS beat(8)7
Avg EPS beat(8)3.21%
EPS beat(12)11
Avg EPS beat(12)4.96%
EPS beat(16)15
Avg EPS beat(16)7.11%
Revenue beat(2)0
Avg Revenue beat(2)-1.79%
Min Revenue beat(2)-2.29%
Max Revenue beat(2)-1.28%
Revenue beat(4)0
Avg Revenue beat(4)-1.81%
Min Revenue beat(4)-2.29%
Max Revenue beat(4)-1.28%
Revenue beat(8)0
Avg Revenue beat(8)-2.09%
Revenue beat(12)4
Avg Revenue beat(12)-0.96%
Revenue beat(16)7
Avg Revenue beat(16)-0.3%
PT rev (1m)-0.31%
PT rev (3m)-4.4%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-7.94%
EPS NY rev (1m)0%
EPS NY rev (3m)-3.52%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.09%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.73 | ||
| Fwd PE | 9.71 | ||
| P/S | 1.22 | ||
| P/FCF | 10.22 | ||
| P/OCF | 7.48 | ||
| P/B | 0.62 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.87 |
EPS(TTM)2.99
EY11.45%
EPS(NY)2.69
Fwd EY10.3%
FCF(TTM)2.56
FCFY9.79%
OCF(TTM)3.49
OCFY13.37%
SpS21.49
BVpS41.79
TBVpS-16.43
PEG (NY)N/A
PEG (5Y)6.1
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.94% | ||
| ROE | 5.37% | ||
| ROCE | 6.36% | ||
| ROIC | 4.98% | ||
| ROICexc | 5.15% | ||
| ROICexgc | 36.43% | ||
| OM | 20.76% | ||
| PM (TTM) | 10.44% | ||
| GM | 34.58% | ||
| FCFM | 11.89% |
ROA(3y)2.96%
ROA(5y)2.06%
ROE(3y)5.4%
ROE(5y)3.79%
ROIC(3y)4.97%
ROIC(5y)4.89%
ROICexc(3y)5.05%
ROICexc(5y)5.02%
ROICexgc(3y)48.4%
ROICexgc(5y)52.54%
ROCE(3y)6.35%
ROCE(5y)6.25%
ROICexcg growth 3Y-16.8%
ROICexcg growth 5Y-7.23%
ROICexc growth 3Y1.76%
ROICexc growth 5Y3.9%
OM growth 3Y1.51%
OM growth 5Y0.42%
PM growth 3Y39.8%
PM growth 5Y6.51%
GM growth 3Y1.31%
GM growth 5Y1.14%
F-Score6
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.42 | ||
| Debt/FCF | 7.14 | ||
| Debt/EBITDA | 3.36 | ||
| Cap/Depr | 116.75% | ||
| Cap/Sales | 4.36% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 66.36% | ||
| Profit Quality | 113.94% | ||
| Current Ratio | 1.31 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 1 |
F-Score6
WACC9.29%
ROIC/WACC0.54
Cap/Depr(3y)108.79%
Cap/Depr(5y)97.47%
Cap/Sales(3y)3.92%
Cap/Sales(5y)3.5%
Profit Quality(3y)93.19%
Profit Quality(5y)387.46%
High Growth Momentum
Growth
EPS 1Y (TTM)0.34%
EPS 3Y1.34%
EPS 5Y1.43%
EPS Q2Q%-10.14%
EPS Next Y-14.56%
EPS Next 2Y-6.25%
EPS Next 3Y-2.59%
EPS Next 5Y1.61%
Revenue 1Y (TTM)-4.25%
Revenue growth 3Y-0.25%
Revenue growth 5Y0.69%
Sales Q2Q%-6.43%
Revenue Next Year-3.75%
Revenue Next 2Y-1.56%
Revenue Next 3Y-0.59%
Revenue Next 5Y0.47%
EBIT growth 1Y-0.79%
EBIT growth 3Y1.26%
EBIT growth 5Y1.11%
EBIT Next Year10.65%
EBIT Next 3Y4.34%
EBIT Next 5Y5.49%
FCF growth 1Y101.53%
FCF growth 3Y-12.18%
FCF growth 5Y1.64%
OCF growth 1Y67.4%
OCF growth 3Y-7.95%
OCF growth 5Y3.33%