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After spending more than a year stuck at a four-star rank, enough top-performing CAPS members have turned bullish on H.J. Heinz (NYSE: HNZ) recently to upgrade it to the highest-possible five stars. A total of 699 members have given their opinion on H.J. Heinz, with many of them offering analysis and commentary explaining the recent optimism.
Many CAPS members think this is a good time to pick up a solid dividend-paying stock like H.J. Heinz for long-term investment. Consumer staples companies like Heinz, Cal-Maine Foods (Nasdaq: CALM), ConAgra Foods (NYSE: CAG), and Kraft Foods (NYSE: KFT) have held up relatively well during the downturn, and Heinz has consistently pulled in positive free cash flow. Many investors believe it is also poised to benefit from an economic rebound when it comes, since the company continues to invest in the future.
With its ketchup and sauce lines, the company has strong brand recognition, similar to the well-known brands of PepsiCo (NYSE: PEP), Coca-Cola (NYSE: KO), and McDonald's (NYSE: MCD). As the recession took hold, Heinz also took advantage of more consumers dining at home by selling more snacks and frozen meals. While other companies have cut prices, Heinz has resisted that pressure, instead focusing on the benefits of long-term pricing power.
The company took a hit to earnings in its most recent quarter because of a stronger dollar, but that pressure may ease going forward; many investors forecast future weakness in the dollar. Heinz has seen strong organic sales growth in emerging markets, and the company expects to continue generating healthy free cash flow this fiscal year.
Do you think H.J. Heinz deserves its five-star status? Add your thoughts in the comments box below on this page, or head over to CAPS to rate the company and check out all the information and opinions the community offers, absolutely free.
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