Author Topic: Investing  (Read 114 times)


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« on: March 31, 2018, 03:15:44 PM »
Kraft Heinz (KHC)
Here's what attracted Warren Buffet to Kraft Heinz...

The combined company generated more than $26.5 billion in revenue in 2016. Of that over $10.3 billion was gross profit, good enough for a gross profit margin of 39%. That's impressive for a company that simply sells ketchup, mustard and Oscar Mayer hot dogs.

And the numbers only get better...

Kraft Heinz generated nearly $4 billion in free cash flow in 2016. Free cash flow is the money left over after the company has paid all of its bills and reinvested back into its business. This is money it can dish out to shareholders in the form of dividends and share buybacks. Kraft Heinz pays out a respectable yield of 2.6%.

What's more Kraft Heinz's profit margin is more than double its competition coming in at 16.2% versus the industry average of 8.2%.

The bottom line is that Buffett may not purchase the "sexiest" companies, but he'll put his money in a concentrated few that are bound to make him a windfall of cash year after year, just like Kraft Heinz has done.