Ketchup king H.J. Heinz
Heinz, General Mills
Ignoring carbs for a moment, Heinz has been shaping up its balance sheet and building cash. The cash conversion cycle -- the time it takes to make a sale and get that cash in-house -- declined from 75 days to 64 days. That is outstanding -- especially for a company Heinz's size. A 200 basis-point increase in return on invested capital (ROIC) further reflects that ability to manage cash.
Others, like Disney
While the long-term strategic plan ultimately calls for capital spending at 2.5% of sales, the plan for 2005 is to stay at the 3% level. If nothing else, Heinz's capital-spending program speaks volumes about the confidence this company has in its operations. And investors get something else of great value -- transparency. The company has a clearly articulated strategy plan and tracks its performance against it.
For all this, the stock trades at 16 times 2005 earnings guidance and yields 3.1%. As such, management's 5.5% to 10% annual earnings growth target makes Heinz a candidate for conservative portfolios. After all, if the low-carb craze is indeed peaking, Heinz should find the high end of its guidance within reach.
Fool contributor W.D. Crotty owns stock in Disney.