Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
-- Kraft Foods
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+ . The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, reasonable valuation levels and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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Highlights from the ratings report include:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- KRAFT FOODS INC has improved earnings per share by 5.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KRAFT FOODS INC increased its bottom line by earning $1.99 versus $1.42 in the prior year. This year, the market expects an improvement in earnings ($2.49 versus $1.99).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Food Products industry average. The net income increased by 5.4% when compared to the same quarter one year prior, going from $976.00 million to $1,029.00 million.
- Net operating cash flow has significantly increased by 60.60% to $2,059.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 24.88%.
Kraft Foods Inc., together with its subsidiaries, manufactures and markets packaged food products worldwide. The company has a P/E ratio of 20.5, above the average food & beverage industry P/E ratio of 20.2 and above the S&P 500 P/E ratio of 17.7. Kraft has a market cap of $72.94 billion and is part of the
industry. Shares are up 12.1% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.