What's Wrong With Kraft Heinz Stock?
Key Points
Kraft Heinz's stock price is down more than 35% over the past five years.
The stock's dividend yield is approaching 7% as the company continues to pay a quarterly dividend of $0.40 per share.
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Investors in Kraft Heinz (NYSE: KHC) have been frustrated for a long time now. Unfortunately, this year isn't any different.
In early October, the stock of this packaged food and beverage company was hovering above its 52-week low, and its price-to-sales ratio was near a 10-year low. There doesn't appear to be much optimism from Wall Street regarding Kraft's ability to grow in the future, either.
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So what exactly is wrong?
Image source: Getty Images.
First and foremost, Kraft's core business is shrinking. In the second quarter of 2026, net sales fell 1.4% year over year, adjusted operating income was down 18.4%, and Kraft recorded a $6.4 billion operating loss. While emerging markets sales rose, North America was down 2.7%.
At the beginning of this year, the consumer staples giant appointed a new CEO, Steve Cahillane, who pivoted away from the company's plans to split into two businesses and instead chose to invest $600 million to revitalize its U.S. market. So far, the strategy doesn't have much to show for itself, but to be fair, it's still quite early in Cahillane's tenure and turnaround plan.
Wall Street is divided on Kraft's comeback. The company's outlook has improved slightly, but business will still likely contract in the coming quarters. Kraft's dividend yield is quite high at 6.75%, and the payout is consistent at $0.40 per share quarterly.
Ultimately, the low price doesn't warrant a buy from me quite yet. The company's turnaround strategy really needs to take hold over the coming year, and my unhealthy ketchup consumption alone isn't enough to do it.
Should you buy stock in Kraft Heinz right now?
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool recommends Kraft Heinz. The Motley Fool has a disclosure policy.
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