NEW YORK (TheStreet) -- Although breakfast cereal sales have slipped 1.4% worldwide, and 15% in the United States since 2010, they have shot up in South Africa and Nigeria by 55% and 77%, respectively. Sales have skyrocketed in Algeria by 122% during the same period.

Kellogg Co. (K) - Get Report has taken a keen eye to this, and has been tweaking its products to satisfy customers worldwide. The company came out with Corn Flakes Instant Porridge to satisfy consumers in South Africa.

Will changing its products to meet new consumer preferences help Kellogg's stock?

Here is the recommendation, according to TheStreet Ratings, TheStreet's proprietary ratings tool.

TheStreet Ratings projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a buy yielded a 16.56% return in 2014, beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a buy yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

When you're done, be sure to read about these top-rated dividend stocks to buy. Year-to-date returns are based on September 25, 2015 prices as of 11:31am.

K data by YCharts
Kellogg Company (K) - Get Report
Rating: Buy, B
Market Cap: $24.2 billion
Year-to-date return: 4.34%

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Kellogg Company, together with its subsidiaries, manufactures and markets ready-to-eat cereal and convenience foods. The company operates through U.S. Morning Foods, U.S. Snacks, U.S. Specialty, North America Other, Europe, Latin America, and Asia Pacific segments.

TheStreet Ratings team rates KELLOGG CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate KELLOGG CO (K) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 44.23% is the gross profit margin for KELLOGG CO which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 6.37% is above that of the industry average.
  • Net operating cash flow has increased to $446.00 million or 15.54% when compared to the same quarter last year. In addition, KELLOGG CO has also modestly surpassed the industry average cash flow growth rate of 9.00%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 8.4%. Since the same quarter one year prior, revenues slightly dropped by 5.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • KELLOGG CO's earnings per share declined by 23.2% 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 $1.74 versus $4.95 in the prior year. This year, the market expects an improvement in earnings ($3.52 versus $1.74).
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: K