Exploring the Sustainability and Growth of The Kraft Heinz Co's Dividends
Introduction to The Kraft Heinz Co's Dividend Announcement
The Kraft Heinz Co (KHC, Financial) recently announced a dividend of $0.4 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-06-06. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into The Kraft Heinz Co's dividend performance and assess its sustainability.
Overview of The Kraft Heinz Co
In July 2015, Kraft merged with Heinz to create the third-largest food and beverage manufacturer in North America behind PepsiCo and Nestle, and the fifth-largest player in the world. Beyond its namesake brands, the combined firm's portfolio includes Oscar Mayer, Velveeta, and Philadelphia. While the retail channel drives around 85% of its total sales, the firm has a growing presence in foodservice. Outside North America, The Kraft Heinz Co's global reach counts a distribution network in Europe and emerging markets that drives 20%-25% of its consolidated sales base, as its products are sold in more than 190 countries and territories.
A Look at The Kraft Heinz Co's Dividend History
The Kraft Heinz Co has maintained a consistent dividend payment record since 2015, with dividends currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Examining The Kraft Heinz Co's Dividend Yield and Growth
The Kraft Heinz Co currently boasts a 12-month trailing dividend yield of 4.60% and a 12-month forward dividend yield of 4.60%, indicating an expectation of same dividend payments over the next 12 months. Over a five-year horizon, this rate decreased to -6.20% per year. Based on The Kraft Heinz Co's dividend yield and five-year growth rate, the 5-year yield on cost of The Kraft Heinz Co stock as of today is approximately 3.34%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio of The Kraft Heinz Co is 0.54 as of 2024-03-31, suggesting that the company retains a significant part of its earnings for future growth and unexpected downturns. The Kraft Heinz Co's profitability rank of 7 out of 10 indicates good profitability prospects, with the company reporting net profit in 9 out of the past 10 years.
The Future Outlook: Growth Metrics
The sustainability of dividends is also dependent on robust growth metrics. The Kraft Heinz Co's growth rank of 7 out of 10 suggests a good growth trajectory relative to its competitors. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, although it underperforms approximately 71.13% of global competitors. Additionally, The Kraft Heinz Co's 3-year EPS growth rate and 5-year EBITDA growth rate further underline the challenges and opportunities in sustaining dividends.
Conclusion and Next Steps
While The Kraft Heinz Co displays a robust dividend history and a strong yield, the future sustainability of these dividends hinges on continued profitability and growth management. Investors should keep an eye on the payout ratio and growth metrics to gauge future performance. For those interested in exploring other high-dividend yield opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
