Stocks have been in a free fall in recent weeks and for dividend investors, that means now may be a great time to lock in some higher-than-normal yields. Kraft Heinz (NASDAQ:KHC) stock is down more than 15% in just the past month, falling from more than $35 a share to just over $29 by the end of last week.
The company unveiled a strategic transformation plan earlier this month where it announced objectives to grow its brand and getting back to being an industry leader. Kraft is “placing the consumer at the center of everything we do” and is increasing marketing spend to help generate more sustainable growth over the long haul. Its long-term growth targets include organic net sales growth between 1% and 2% adjusted EBITDA growth between 2% and 3%.
Overall, there hasn’t been anything of late to take place that would’ve suggested Kraft’s recent stock decline makes sense. Shares of the company are trading well below book value and at a forward price-to-earnings multiple of less than 12.
This is also still a company that Buffett believes in and that’s still in the Berkshire Hathaway (NYSE:BRK.A) portfolio.
Kraft did reduce its dividend payments in 2019 but even at $0.40 every quarter, the stock’s still yielding a very decent 5.5% yield. You have to go back to May for the last time that Kraft’s stock was trading below $29.
Grabbing the stock at this price could be a steal of a deal. Not only is it a cheap buy, but it pays a good dividend and its products are common in many households across the world, making it a fairly stable investment, especially amid a pandemic.