Kraft Is a Solid Defensive Pick

NEW YORK (TheStreet) -- Which one of Kraft's (KFT) (KRFT) grocery brands is your favorite?

Among others, there is Oscar Mayer, Velveeta, Planters, Philadelphia, Maxwell House, Lunchables, Capri Sun, Kool-Aid and Jell-O. It is easy to see why the company's Web site says that Kraft is well known to 98% of households in the U.S.

The company's first-quarter results, released late Thursday, show some progress on earnings and free cash flow, even though the timing of a late Easter hurt sales. Earnings rose 13% and beat Wall Street estimates.

Kraft's grocery brands are what's left after the company split itself in two in October 2012, creating a snack-foods company called Mondelez (MDLZ) that includes Oreos cookies and Trident gum.

Both companies' stock has done fairly well during the past year, although both have trailed the S&P 500 during that time. Kraft's stock is up 11% and Mondelez has risen 12%, compared with the S&P 500's rise of 18%.

Kraft's stock was trading at $56.05 at 2:15 p.m. Friday, down 1.13% for the day.

Although Kraft may never be an exciting growth company, it can be a rewarding one for shareholders by keeping its brands relevant, managing its cost and putting an emphasis on cash that allows it to pay a generous dividend with a yield of 3.75%.

As a lower-valued and dividend-yielding consumer-goods business, Kraft fits well into many investor portfolios.

At the time of publication, the author had no position in any of the stocks mentioned.

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