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Heinz (HNZ) reported second quarter results earlier in the week. Should shareholders be thankful for the data in the press release? I would guess that those who aren't the type to buy and sell on a dime, and are holding for the long haul, will find this consumer-products company's numbers good enough.
The business made 76 cents per share from continuing operations. Last year, a profit of 86 cents per share was recorded on the same basis. However, as several news items have mentioned, there was a gain of 18 cents per share in the comparable quarter relating to hedging activities. So, the current quarter actually turns out to look a lot better once a little context is attached.
More interesting than the earnings in many respects is the cash flow. According to management, Heinz more than doubled its operating free cash flow. Want more awesome news? Cash flow should hit $1 billion once the full fiscal year is ready for the history books. Besides cash generation, Heinz is doing superbly with organic growth and the gross margin metric.
Yep, Heinz is healthy. It appears to be keeping up with colleagues Kraft (KFT), ConAgra (CAG), and Campbell Soup (CPB). So long as the powers that be focus on cash flow, dividend investors can be confident of future hikes in the quarterly payout.
When it comes to valuation, the stock, from one perspective, is obviously not as cheap as it once was. As of Wednesday's final trading price, shares were close to the 52-week high.
However, the yield is still tasty. Sitting a little under 4%, Heinz definitely pays you to be an owner. Investors looking to buy into a consumer brand won't be wasting their time checking out this company.
Disclosure: I don't own any company mentioned; positions can change without notice.
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