Wednesday, February 9, 2011

Stock Idea: Kraft Foods Inc. (KFT, $31.24)

(May 16, 2011 update: All future stock posts will appear on my new subscription-only website at Please visit!)

Kraft Foods Inc. (KFT) sells food products in about 160 countries. Its brands include Nabisco, Oscar Mayer, Cadbury, Philadelphia, Maxwell House, Oreo and more. Food stocks aren't hot right now, because food and commodity prices are rising, which puts a strain on companies like Kraft to find creative ways to minimize consumer price increases.

Nevertheless, projected consensus earnings per share growth is 13.8% and 11.7% for fiscal years 2011 and 2012, so despite wholesale price increases, this very large company continues to grow at an attractive rate. Kraft's dividend is $1.16 per share and yields 3.71%. The PE is 13.5 based on 2011 eps, and the beta is 0.7.

Kraft stock is recovering from the financial meltdown, and otherwise has been in a trading pattern for the past decade. It rises to $36, then bounces back down. If I buy it today and sell it at $35.50, I move my portfolio value up. Kraft is not an exciting stock, but I don't look for excitement. I look for ways to consistently make 10-25% in a few months.


The Right Huff is Crista Huff's blog for politics and items of sociological or financial interest. Crista Huff also manages Goodfellow LLC, a subscription-only stock market website. We strive to identify financially healthy companies in which traders and investors can buy shares and earn dividends and capital gains. See disclaimer for the risks associated with investing in the stock market. See your tax advisor for the tax consequences of investing. See your estate planning attorney to clarify beneficiary and inheritance issues associated with your assets.

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