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.

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

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