12-Month Net Income Growth: 72%
Quarterly Operating Profit Margin: 14%
Cash Flow Multiple: 16 (12% peer premium)
Analysts' Median Target: $34.71
3-Year Dividend Growth: 4.4%
Dividend Yield: 3.8%
Payout Ratio: 73%
2011 Catalyst: Though expensive based on cash flow, Kraft is cheap relative to packaged-food peers based on its forward earnings multiple of 13, book value multiple of 1.6 and sales multiple of 1.2. Quarterly revenue rose 23%, boosted by the Cadbury buy. Developing-market revenue surged 70%, with double-digit percentage gains in the Latin America and Asia-Pacific regions. According to management, the Cadbury purchase is already creating cost savings and gave the formerly U.S.-focused company a tremendous foothold in emerging markets. It's using "power brands" to garner loyalty as middle classes form in Brazil, India, China and elsewhere and ramp up consumption. Bullish Scenario: JPMorgan forecasts that Kraft's stock will rise 30% to $40. Bearish Scenario: Deutsche Bank predicts that the shares will decline to $30.