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Endorsements from financial heavyweights like Warren Buffett and Bill Gates can often signal a golden opportunity for investors. Both titans have advocated investing in stable industry stalwarts, which offer the benefits of capital appreciation as well as reliable dividend payouts.
Kraft Heinz Company (NASDAQ:KHC), a global food and beverage powerhouse, has garnered the approval of both Buffett and Gates.
Warren Buffett, often regarded as one of the most successful investors of all time, has long held a substantial stake in Kraft Heinz. Through his company Berkshire Hathaway, Warren Buffett holds over 325 million shares of KHC, valued at $12.04 billion, as of May 2, 2024. Notably, Buffett’s stake in Kraft Heinz accounts for 3.47% of his total equity portfolio. With billions of dollars invested, Buffett’s confidence in Kraft Heinz may reassure some investors despite its recent struggles.
Bill Gates, on the other hand, holds approximately 2.62 million shares of KHC, valued at $96.9 million, through the Bill & Melinda Gates Foundation Trust (as of February 14, 2024). While Gates’ stake in Kraft Heinz is comparatively smaller than Buffett’s, his recent activity suggests continued interest.
The renowned philanthropist and investor made a significant addition to his portfolio by acquiring 2.62 million shares of Kraft Heinz, valued at $93.7 million, back in the third quarter of 2022. Moreover, the Microsoft co-founder has never sold any shares of KHC to date. This move indicates that Gates sees potential value in Kraft Heinz, aligning with Buffett’s long-term investment approach.
Kraft Heinz Dividend Allure and Growth Prospects
The Kraft Heinz Company has remained consistent with its dividend payouts since its formation via merger in 2015. The consumer goods company currently pays $1.60 in dividends annually, yielding 4.48% on the current stock price. In addition, the company’s four-year average dividend yield stands at 4.39%.
While endorsements from renowned investors like Buffett and Gates undoubtedly carry weight, Kraft Heinz’s recent performance trends, coupled with ongoing challenges in the food and beverage industry, warrant careful consideration.
Shares of KHC have dropped by over 10% over the past year and by just 2% year-to-date. The company’s net sales fell by 1.2% year-over-year to $6.4 billion in the fiscal first quarter of 2024, which ended March 30. Nonetheless, Kraft Heinz’s adjusted EPS amounted to $0.69 in the last quarter, indicating a 1.5% rise from the same period last year.
Analysts are bullish on Kraft Heinz’s growth prospects in the near term. The consensus revenue estimate of $26.69 billion for fiscal 2024 indicates a 7.9% improvement from the same period last year. Furthermore, Wall Street estimates the company’s bottom line to improve by 9.4% year-over-year to $3.03.
Deutsche Bank currently has a “Buy” rating on KHC stock with a price target of $43, indicating a potential upside of over 18%. Bank of America Securities also has a similar “Buy” rating on the staple consumer goods company, with a price target of $42, indicating a potential upside of over 15%.
Preparing for a Market Downturn? This Emerging Asset Class Could Offer The Protection You’re Looking for
Institutional investors have recently discovered a new strategy to hedge against market volatility and enhance portfolio stability – home equity investments (HEIs). HEIs allow investors to gain exposure to residential real estate by purchasing a portion of a homeowner’s equity in their property. In exchange for a lump sum payment, investors receive a share of the future appreciation of the home’s value.
According to Morningstar DBRS Senior Vice President Derek Moran, “Interest in this market is high and can be expected to continue growing, especially if interest rates remain high, and homeowner equity stays strong.”
HEIs offer compelling benefits for investors, including:
Diversification: HEIs provide exposure to the residential real estate market, helping to diversify portfolios heavily allocated to stocks and bonds.
Attractive returns: HEIs have the potential to generate strong returns, particularly in an environment of rising home prices. Originators often secure HEIs at a discount to market value, providing immediate upside potential.
Downside protection: HEI contracts typically include protective provisions that mitigate losses in the event of declining property values.
Uncorrelated returns: HEI performance is primarily driven by home price appreciation rather than interest rates or stock market fluctuations.
Now, with the emergence of innovative platforms like Cityfunds, retail investors can access this institutional-grade asset class with as little as $500. Cityfunds allows you to invest in the equity of carefully selected properties in prime locations, targeting potential appreciation while mitigating risk.
Investors can choose to invest in specific cities through Cityfunds’ offerings, such as Miami, Austin and Los Angeles, gaining exposure to some of the strongest real estate markets in the country. These Cityfunds have demonstrated impressive appreciation, with shares of the Miami Cityfund up 14.7% already and up 10.9% for the Austin Cityfund.
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Warren Buffett and Bill Gates spending time together. Photo by BorsheimsJewelry on Flickr
This article Buffett And Gates Continue Holding This Dividend Stock, But Is It Still A Buy? originally appeared on Benzinga.com
Source: finance.yahoo.com