Kellogg Company Stock Buy Recommendation Reiterated (K)
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- K's revenue growth trails the industry average of 35.4%. Since the same quarter one year prior, revenues rose by 12.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 39.00% is the gross profit margin for KELLOGG CO which we consider to be strong. Regardless of K's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.05% trails the industry average.
- KELLOGG CO's earnings per share declined by 13.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, KELLOGG CO reported lower earnings of $2.67 versus $3.38 in the prior year. This year, the market expects an improvement in earnings ($3.85 versus $2.67).
- K's share price has surged by 29.23% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Food Products industry and the overall market, KELLOGG CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
--Written by a member of TheStreet Ratings Staff. Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100%. See his top picks for 14-days FREE.
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