Heinz (STOCK QUOTE: HNZ), the world's largest maker of ketchup, is one of a few companies largely immune to a global economic slowdown. The company is benefiting from lower commodity prices and the ability to raise its own prices, protecting profit margins at a time when other companies' earnings are collapsing. TSC Ratings gives the stock "A" and "Buy" ratings.

Heinz had average gross, operating and net margins of 36%, 15% and 8%, respectively, over the past 10 years, despite accelerating inflation, led by gasoline prices. The company's products are relatively price inelastic as they represent a low share of a consumer's income. Add to that well-known brand names, and the result is pricing power that produces consistent earnings.

Heinz has a high and stable ROE, averaging 44% over a decade. The ROE figure is exaggerated by the company's capital structure, which is reliant on debt. However, the load is not excessive and remains within outer bands, with 60% of total assets of $10.5 billion being funded by debt and other liabilities. This is high but not unmanageable.

For a large, mature multinational company, Heinz trades at a slightly high price-to-earnings ratio of 18. Nevertheless, we put a price target of $60 on the stock, based on the company's pricing power and expansion into emerging markets. Heinz's all-time high was about $55 in 1999.

Heinz improved earnings per share by 14.3% in the most recent quarter compared with a year earlier. The company has demonstrated a pattern of positive earnings per share growth over two years. We expect this to continue. During the past fiscal year, Heinz increased its bottom line by earning $2.63, which compares with $2.38 in the same period a year earlier. The expectations for 2009 are for earnings to reach $2.91 per share.

Net income growth from the same quarter 12 months earlier greatly exceeded that of the S&P 500, but is less than the food products industry average. Net income increased by 11.5% to $228.96 million from $205.29 million.

Sales at the North American Consumer Products segment rose almost 12%, while Heinz Europe jumped 20% and Heinz Asia/Pacific sales ballooned 23%.

Sixty percent of the company's product portfolio is in Health & Wellness, a section growing at twice the industry rate. This is a higher-margin business and includes infant and nutrition brands, and weight management products.