_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Kraft Heinz Company (XNAS:KHC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
KHC
Name:
THE KRAFT HEINZ COMPANY (XNAS:KHC)
Sector:
272.00M
Industry:
Packaged Foods
CEO:
Mr. Miguel Patricio
Total Employees:
36,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -96.77% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE KRAFT HEINZ COMPANY(KHC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND PACKAGED FOODS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
37.31
One Month Price Target:
$37.46
Six Month Price Target :
$38.2
Likely Price in One Year's Time:
Ticker:
$39.09
Likely Trading Range Today Under (Normal Volatility)
$37.2
Price Upper limit ($) :
$37.46
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$35.75
This week:
$33.82
This month :
$30.34
Other Primary facts
Market Cap:
45.87B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.23B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.49%
-15.22%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$44.54
$41.22
$30.08
$33.40
Medium risk (<10%) entry points
Buy Call
Sell Call
$40.13
Buy Put:
Sell Put:
$39.42
$34.48
$35.20
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
KHC
Sharpe Ratio:
1.77%
Comparison:
KHC, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 34.97% higher than the industry
& is -22.40% lower than the market/S&P 500 average
Average Returns/Yield of
KHC
Daily returns:
0.05%
Weekly returns:
0.23%
Monthly returns:
0.90%
Yearly returns:
8.42%
Comparison of returns:
Average annual returns/yield (last 3 years) is 28.90% above industry average
Classification:
KHC, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.71
Statistical test of Returns:
KHC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.06%
Weekly Volatility:
4.60%
Monthly Volatility:
9.19%
Yearly Volatility:
31.85%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.13%
Volatility in last five trading days has been -44.85% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.18%
Weekly VaR:
-9.34%
Monthly VaR:
-18.68%
How Much Can the price of
KHC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-64.71%
This translates to price declining to:
$31.34
This translates to price declining to:
$13.16
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
KHC is a 31.85% riskier investment compared to the market/S&P 500 & is 12.96% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -10.11% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
KHC
Beta in relation to market/S&P 500--0.71
Expected beta in 1 year's time:
0.565
Expected beta in 3 year's time:
0.799
Unlevered (debt free) Beta:
0.562
Beta in relation to Nasdaq (XNAS):
0.5
Beta in relation to all global stocks::
0.663
Beta Comparison & Analysis
Beta of competitors/peers::
0.716
Beta is -0.70% lower than peers
Average Industry Beta:
0.586
Beta is 21.38% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.028
Alpha is 125.48% above industry average alpha yield
Alpha is 180% higher than market/& is unsustainably high
Analysis of Cost of Capital of
KHC
Equity cost of capital:
0.080
Equity cost of capital is 11.98% above industry mean WACC
Unlevered (without debt) cost of capital:
6.34%
Before-tax cost of debt:
8.62%
After-tax cost of debt:
6.81%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
6.81%
WACC is 36.85% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$20.97
Revenue growth rate per share of (3Y):
0.92
Annual revenue growth rate is -103.56% below industry average
EPS:
$0.99
Expected Annual growth rate of EPS (3Y):
-26.41%
Expected future EPS growth rate is -246.43% lower than the Packaged Foods industry
Free cash flow (FCF) per share:
$3.34
Balance sheet equity growth per share: -38.71%
Equity growth rate per share is -897.20% lower than the industry
Debt per share
$17.11
EBITDA per share
$3.87
Valuation Analysis Today of
KHC
P/E Ratio:
36.07
P/E Ratio of Competitors/Peers:
20.37
P/E ratio is 77.04% higher than main peers & is -6.66% lower than the industry
Stock price/value with industry average P/E ratio: $38.25
KHC is -2.47% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $31.54
Present value of the expected future dividends only: $19.95
P/S (Price to Sales ratio):
1.78
Price to sales ratio is -23.26% below the industry mean
P/B (Price to book value ratio):
0.92
Price to free cash flow: 11.16
Price to free cash flow ratio is -67.98% lower than the industry
Net income growth rate (3Y):
-109.89%
Net income growth rate is -1121.44% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 40.00%
Dividend yeild: 4.29%
Previous Dividend: $0.40
Previous adjusted dividend: $0.40
Previous Dividend: $1.60
-
-
Average dividend payment (long-term): $0.40
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 22/09/2022
Expected next dividend record date: 25/08/2022
Expected next dividend declaration date: 26/07/2022
Previous dividend payment date: 24/06/2022
Previous dividend record date: 27/05/2022
Previous dividend declaration date: 27/04/2022
Dividend History:
2022-05-26--$0.40
2021-11-24--$0.40
2021-05-27--$0.40
2022-03-10--$0.40
2021-08-31--$0.40
2021-03-11--$0.40
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
42.24%
Net debt to equity ratio:
37.81%
Debt to assets ratio:
22.34%
Net debt to assets ratio:
20.00%
Debt-to-asset ratio is -58.55% below industry average
Ability to repay debt:
Interest coverage ratio:
2.53
Interest coverage ratio is -98.97% less than industry average
Looking forward:
Debt growth rate:
-22.93%
Annual debt growth is -108% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.04%
Analysis of Key Statistics
Correlation of price movement with the market:
0.565
Statistical significance of correlation:
KHC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.429
Stock price is 31.69% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.429
Correlation of price movement with Nasdaq (^IXIC):
-0.001
Covariance of price movement with the market:
-0.001
Kurtosis
18.565
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.519
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
KHC
Gross Profit Margin Ratio:
131%
Operating Profit Margin Ratio:
12.23%
Operating profit margin is 153.43% higher than the industry
Net Profit Margin Ratio:
131%
Effective Tax Rate:
37.37%
Effective tax rate is -8.33% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
2.47%
Return on equity (ROE) is -77.66% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.31%
Return on assets (ROA) is -70.78% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
1.02
Current ratio is -62.70% below industry average
Cash Conversion Cycle (days):
41.6
Cash conversion cycle is -15.33% below industry average
The remaining useful life of property plant & equipment is: 6.3 years
Stock based compensation to net income ratio:
2.78%
In-depth Efficiency Analysis
Revenue generated per employee:
713.7K
Each employee generates -9% less revenue than industry average revenue per employee
EBITDA generated per employee:
131.8K
Each employee generates 17% more EBITDA than industry average revenue per employee
Profit generated per employee:
34.0K
Each employee generates -35% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
7.6K
Each employee generates -303% less free cash flow than industry average revenue per employee
Assets/Capital per employee
2.3M
Each employee generates -303% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
KHC
MONSTER BEVERAGE CORPORATION (XNAS:MNST)
DOLLAR TREE, INC. (XNAS:DLTR)
CHS Inc. (XNAS:CHSCM)
CASEY'S GENERAL STORES, INC. (XNAS:CASY)
Innovator Lddrd Alloc PB (BATS:BUFF)
PILGRIM'S PRIDE CORPORATION (XNAS:PPC)
COCA-COLA CONSOLIDATED, INC. (XNAS:COKE)
HELEN OF TROY LIMITED (XNAS:HELE)
CHS Inc. (XNAS:CHSCN)
Current Analyst Ratings
Strong buy�17%
Buy�42%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/26/22
Revenue:
25.69B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
17.28B
8.41B
-
886.00M
3.53B
-
-
3.53B
15.00M
1.87B
908.00M
4.75B
3.14B
1.23B
1.98B
738.00M
1.23B
Statement of Cash Flow
Date:
Period:
220.00M
Differed Income Tax :
23.00M
Stock Based Compensation :
34.00M
Change in Working Capital :
- 472000.00K
Accounts Receivables:
- 123000.00K
Other Working Capital:
-
Other Non-Cash Items:
- 100000.00K
Net Cash Provided by Operating Activities:
486.00M
Investments in PP&E:
-
Net Acquisitions:
- 261000.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/26/22
2022
Q1
2.98B
-
2.98B
2.07B
3.09B
1.14B
9.28B
6.60B
31.44B
43.64B
-
-
2.91B
84.59B
-
93.86B
4.61B
780.00M
-
-
3.67B
9.06B
20.97B
1.85B
34.96B
-
44.02B
12.00M
- 905000.00K
- 1812000.0K
-
March 26, 2022 at 6:00:00 AM
20.81B
49.64B
93.66B
-
21.75B
18.8B
-
- 208000.00K
- 469000.00K
- 9000.00K
-
-
- 490000.00K
14.00M
- 485000.00K
2.00M
- 466000.00K
2.98B
3.45B
486.00M
- 214000.00K
272.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
KHC
2023
2024
2025
2026
2027
$34.71
$36.37
$38.11
$39.93
$41.84