Kraft Heinz has underperformed, delivering a -11% total return over five years versus the S&P 500's 98%. I see KHC shares as attractively valued, with investor skepticism driving a depressed multiple despite a number of recent positive catalysts. The recently announced CEO change and planned company split are positive catalysts for KHC's stock.
Berkshire Hathaway removed Kraft Heinz from the list of operating companies on its website. Warren Buffett's company cut the food giant in April, the Wayback Machine shows.
Kraft Heinz is undergoing a major restructuring, including a planned business split and the appointment of a new CEO with relevant M&A experience. Kraft Heinz shares are now cheap enough to account for the company's lackluster operational results. Despite persistent structural challenges and negative sentiment, the current valuation offsets downside risk.
General Mills' stock sold off heavily this year, raising its dividend yield. Shares in Kraft Heinz, despite their chronic underperformance, may deliver stronger gains in the coming year, thanks to an upcoming corporate divestiture.
Kraft Heinz announced on Tuesday that new CEO Steve Cahillane will join the food giant to help steer its split into two companies. The former head of Kellanova joins the ailing food giant after years of declining sales and slow growth, and as shares are down 75% since 2017.
Kraft Heinz is changing its leadership as it moves ahead with plans to break itself into two companies, ending a turbulent chapter marked by falling sales and investor frustration. The food conglomerate said Steve Cahillane, a veteran consumer goods executive and former chief executive of Kellanova, will become chief executive of Kraft Heinz from Jan.
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