Kraft Heinz Co (KHC) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/B below the industry

Kraft Heinz's price-to-book of 0.80 is below the Food and Kindred Products median of 2.12.

Trading below fair value

The share price of $24.27 is below our fair value estimate of $36.11.

Margin of safety over 20%

The price is 32.8% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -2.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew -1.5% over the last twelve months; the Food and Kindred Products median is 2.6%.

Guidance raised

Kraft Heinz raised its fiscal year 2026 Organic Net Sales outlook on Aug 5, 2026.

Gross margin slipping

Gross margin was 33.5% over the last twelve months, against 33.7% a year earlier.

Return on equity under 15%

Return on equity was -9.0% over the last twelve months and averaged 1.1% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was -4.7%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Kraft Heinz's return on equity of -9.0% is below the Food and Kindred Products median of -2.5%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was -14.0% over the last twelve months, against a 5-year average of 2.1%.

Net margin below the industry

Kraft Heinz's net margin of -14.0% is below the Food and Kindred Products median of -5.7%.

High debt

Debt is 50.0% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 56.5% five years ago to 50.0%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 24.1% of total debt.

Interest not well covered

Operating income covers interest expense -5.1 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.02 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 0.50; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Kraft Heinz paid dividends worth 6.6% of the share price over the last twelve months.

Yield above Treasuries

The 6.6% yield is above the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; Kraft Heinz yields 6.6%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Covered by free cash flow

Dividends take 53.7% of free cash flow.