NEW YORK (TheStreet) --Kellogg Company (K) - Get Kellogg Company (K) Report , the iconic cereal and snack food purveyor from Battle Creek, Mich., is winning accolades for its corporate ethics and social integrity. Shareholders and consumers are applauding and taking notice in more ways than one.

Kellogg's is a pure-play food company with a 100-year plus legacy of maintaining integrity in the way it operates its business, serves its customers, and creates value for investors. I've been following the company for the past two years and the more I've learned about it the more I like it.

For shareholders and ethical investors looking for a publicly traded company that puts its conscience in synch with its corporate objectives, Kellogg's is one of the best. In fact, once again it's been recognized as one of the World's Most Ethical Companies by Ethisphere Institute, an independent research center promoting best practices in corporate ethics and governance. In fact, Kellogg has been recognized six times.

One example: When Kellogg was hit by a shareholder proposal filed by the Green Century Equity Fund, the company decided to commit to only purchase deforestation-free palm oil by Dec. 31, 2015. Kellogg's uses palm oil in its snack food products and came under scrutiny over its joint venture with Wilmar, the world's largest palm oil trader with a high-profile track record of controversial environmental practices.

Lucia von Reusner, Shareholder Advocate at Green Century Capital Management, confirmed via email that "By raising the bar, Kellogg's palm oil commitment should encourage other companies to step up and support the development of transparent and responsible palm oil supply chains."

An investor who aims to be socially responsible finds this kind of ethical corporate effort encouraging. Like me, you can follow Kellogg's and monitor its sustainable and environmentally sensitive practices.

The other side of my enthusiasm for Kellogg's is it's business model and products. Not only is it the world's leading cereal company, it's also the second largest producer of cookies, crackers and savory snacks and a leading North American frozen foods company.

With 2013 sales of $14.8 billion and more than 1,600 food products it's little wonder that besides General Mills (GIS) - Get General Mills, Inc. (GIS) Report, Kellogg's is one of the most popular food stocks among investors. Average daily volume is about 2 million shares and its current market cap, according to Yahoo! Finance is $22.38 billion.

The stock's dividend yields 3% at a share price of $61.30 a share. This represents a sustainable payout ratio of 36% and leaves room for dividend increases in the year ahead.

As the one-year chart below illustrates the stock rebounded from an early 2014 swoon and is nearly 2% higher than where it started the year.

data by YCharts

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Along with TheStreet Quant Ratings I rate Kellogg's as a buy. From the chart above you'll see two reasons. It's trailing 12-month (TTM) Return on Equity (ROE) of 64% significantly exceeds both the industry average and the S&P 500. Its TTM operating margin of nearly 20% is also exceptional.

Another impressive number is the company's net income which grew by 2,656.3% from the year-ago quarter rising from -$32 million to $818 million. In fact, according to TheStreet it exceeded that of the S&P 500.

Along with the improvements in net income, the net profit margin of 23.36% is significantly better than the industry average.

No company is perfect, and Kellogg's net operating cash flow increased by only 9.13% to $418.00 million from the year-ago quarter. This is much lower than the industry average growth rate of 53.43%. Plus, according to Yahoo! Finance, Kellogg's most recent quarterly long-term debt was a daunting $7.36 billion.

My firm conclusion is that the many strengths of Kellogg's, like its ability to generate exceptional earnings and its outstanding ROE outweigh its generally high debt management risk.

With its extensive lineup of famous brands, outstanding net income and it's stellar reputation for ethics and integrity, Kellogg's is a comfortable fit for socially responsible and proactive investors.

At the time of publication the author had no positions in K or GIS.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.


Marc Courtenay is the founder and owner of Advanced Investor Technologies, LLC, as well as the publisher and editor of