Kraft Heinz (KHC +1.14%) might be a purveyor of some of the most familiar food and condiment brands in the American pantry, but it hasn't been a very flavorful stock lately. Its shares have generally underperformed the broader stock market for years, due to lackluster results and a not-very compelling business profile.
There is one group of market participants that continues to find Kraft Heinz tasty, though -- income investors. That's because the company has been a steady and reliable dividend payer in spite of its numerous struggles. Let's take a look at how much it'll pay out in dividends this year, and whether this makes it a worthwhile investment.
Five years of the same payout
So far this year, Kraft Heinz has made two quarterly dividend payments, each totaling $0.40 per share. It has kept this level since the beginning of 2019.
Barring any major change in the company's operations, it seems likely that there won't be a change in the payout. If that's the case, then Kraft Heinz will pay out $1.60 per share in dividends in 2024.
While the company isn't a regular dividend raiser like other popular stocks, that $1.60 per share does push the company into high-yield dividend territory. At that level it pays out at 4.4%, far above the 1.4% average yield of S&P 500 index component stocks.
NASDAQ: KHC
Key Data Points
A high-yield dividend stock with limited potential
Kraft Heinz is a big, slow-growing beast of a company, at times even seeing sales shrink. Nevertheless, it's consistently profitable and generates big piles of cash (its products are ubiquitous, after all). That stack of greenbacks has typically been more than enough to fund the dividend, so as far as the payout goes this is a relatively safe stock to own.
For me, though, safety isn't enough. There are other stocks on the market that offer a meaty dividend and have far better growth potential -- both in terms of fundamentals and stock price. Given that, Kraft Heinz isn't a compelling investment to me.
