Warren Buffett attracts a lot of attention. As the world's third-richest person and most celebrated investor, thousands try to glean what they can from his thinking processes and track his investments.

While we can't know for sure whether Buffett is about to buy Sara Lee (NYSE: SLE) -- he hasn't specifically mentioned anything about it to me -- we can discover whether it's the sort of stock that might interest him. Answering that question could also inform whether it's a stock that should interest us.

In his most recent 10-K, Buffett lays out the qualities he looks for in an investment. In addition to adequate size, proven management, and a reasonable valuation, he demands:

  1. Consistent earnings power.
  2. Good returns on equity with limited or no debt.
  3. Management in place.
  4. Simple, non-techno-mumbo-jumbo businesses.

Does Sara Lee meet Buffett's standards?

1. Earnings power
Buffett is famous for betting on a sure thing. For that reason, he likes to see companies with demonstrated earnings stability.

Let's examine Sara Lee's earnings and free cash flow history:

Sle

Source: Capital IQ, a division of Standard & Poor's. Free cash flow is adjusted based on author's calculations.

Over the past five years, Sara Lee has generated fairly consistent earnings, if you judge by free cash flow. The loss in 2008 was largely due to asset writedowns.

2. Return on equity and debt
Return on equity is a great metric for measuring both management's effectiveness and the strength of a company's competitive advantage or disadvantage -- a classic Buffett consideration. When considering return on equity, it's important to make sure a company doesn't have an enormous debt burden, because that will skew your calculations and make the company look much more efficient than it actually is.

Since competitive strength is a comparison between peers, and various industries have different levels of profitability and require different levels of debt, it helps to use an industry context.

Company

Debt-to-Equity Ratio

Return on Equity (LTM)

Return on Equity (5-year average)

Sara Lee

191%

27%

11%

Kellogg (NYSE: K)

260%

50%

54%

Hormel Foods (NYSE: HRL)

23%

19%

16%

Smithfield Foods (NYSE: SFD)

60%

17%

4%

Source: Capital IQ, a division of Standard & Poor's.

Sara Lee generates moderate-to-high returns on equity, but it carries a high debt-to-equity ratio.

3. Management
CEO Marcel H.M. Smits has only been at the job since January. Prior to that he'd worked at Unilever for a number of years, in finance and telecom, before becoming an executive vice president at Sara Lee.

4. Business
I understand that some scientists are attempting to produce meat in a lab setting, but by and large food isn't particularly susceptible to technological disruption.

The Foolish conclusion
Regardless of whether Buffett would ever buy Sara Lee, we've learned that while it produces fairly consistent earnings and operates in a straightforward industry, it doesn't particularly exhibit some of the quintessential characteristics of a Buffett investment: high returns on equity with limited debt and long-tenured management.

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Ilan Moscovitz doesn't own shares of any company mentioned. You can follow him on Twitter @TMFDada. Motley Fool newsletter services have recommended buying shares of Kellogg and Unilever. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.