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The Kraft Heinz Company Is Simply Savory


Kraft Heinz is about as solid as they come when it comes to reliable, dividend-paying American staple brands.

3G should deliver outstanding returns over the next few years as they initiate their famed "cuts and acquire" cycle of prodigious wealth building anew with this processed foods behemoth.

We have only seen the tip of the iceberg to the overhaul of this company. We are in "phase one of an ongoing corporate plan." Buckle up!

Back in August, the Kraft Heinz Company (NASDAQ:KHC) reported its last results as two separate companies. Although Kraft and Heinz are now combined into a single processed foods behemoth and since the merger transaction did not officially close until July 2, Q2 2015 represented the last hurrah of "the standalone Kraft Foods Group and standalone H.J. Heinz Holding Corporation."

Initial enthusiasm after the August 10 announcement incited a spike in the share price to $79.99, but by the end of the week the stub had fallen to as low as $75.15 on Friday. KHC closed out the week in a solid uptrend, ending the week at $76.42.

On the whole, the volatility in the shares over that initial week after the announcement of Q2 earnings (over 6% from peak to trough) represented much ado about nothing. The Q2 results did not matter one bit. Cuts continued at Heinz. Kraft saw moderate growth overseen by an army of middle managers that likely contributed virtually nil to the company's performance.


Then the fun began.

Long-term investors should not be too concerned about KHC's upcoming results even as a newly formed entity. The stub represents a sturdy dividend stalwart that should see consistent top-line and margin expansion over the next few years due to a trend of improving its overall efficiency (both financial and operational) and increasing its international distribution of American staple foods. In the most recent market malaise, shares provided a steady hand to any portfolio by not going any lower than $69.20.

Given this...