Is KHC a good stock to buy? We came across a bullish thesis on The Kraft Heinz Company on StockCompass’s Substack. In this article, we will summarize the bulls’ thesis on KHC. The Kraft Heinz Company’s share was trading at $25.01 as of July 1st. KHC’s trailing and forward P/E were 22.43 and 12.25 respectively according to Yahoo Finance.
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The Kraft Heinz Company, together with its subsidiaries, manufactures and markets food and beverage products in North America and internationally. KHC is positioned as a contrarian deep-value opportunity in the consumer staples sector, offering an unusually high 6.56% free cash flow-backed dividend yield as its shares trade near historic lows following years of valuation compression and investor skepticism.
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Despite reporting a FY2025 GAAP loss driven by a $9.3 billion non-cash goodwill impairment, the company continues to generate strong underlying cash flows, producing $3.66 billion in trailing twelve-month free cash flow that comfortably supports its $1.60 annual dividend with a sustainable 52% payout ratio.
This disconnect between reported earnings and cash generation has contributed to an attractive valuation, with Kraft Heinz trading at just 0.69x price-to-book value and approximately 12x adjusted earnings, well below broader packaged food industry averages. The investment thesis rests on the market potentially recognizing the company’s resilient cash-generating ability rather than focusing on accounting-driven losses.
Operationally, while North American organic sales remain under pressure as management continues executing a multi-year turnaround, the international business provides encouraging momentum with 4.2% organic growth in the first quarter of 2026, demonstrating that portions of the portfolio continue to expand. The presence of Berkshire Hathaway, which owns a 26.9% stake, further reinforces long-term confidence and aligns shareholders with a disciplined value-oriented investor.
Although the turnaround remains unproven and investor concerns surrounding the balance sheet persist, Kraft Heinz is viewed as a business with durable brands, resilient cash flows, and meaningful downside support from its historically attractive valuation and dividend yield. For patient, risk-tolerant income investors, the current entry point offers substantial income while awaiting operational stabilization and a potential rerating as sentiment improves, creating an attractive long-term risk-reward profile.