Foodmakers use acquisitions to spur growth

Article Excerpt

In response to rising consumer demand for more healthful foods, these four industry leaders continue to make acquisitions to lift their sales. It’s unclear how long it will take for their new operations to pay off. That’s why we see three of these four food stocks as holds. However, Campbell Soup’s new plan to sell or spin off some of its operations make it a buy. KRAFT HEINZ CO. $63 (Nasdaq symbol KHC; Income Portfolio, Consumer sector; Shares o/s: 1.2 billion; Market cap: $75.6 billion; P/S ratio: 2.9; Divd. yield: 4.0%; TSINetwork Rating: Above Average; www.kraftheinzcompany.com) makes condiments and sauces (such as Heinz Ketchup). Its packaged foods include Velveeta and Philadelphia Cream Cheese; meats, including Oscar Meyer hot dogs; and beverages such as Maxwell House coffee. For the quarter ended March 31, 2018, sales decreased by 0.3%, to $6.30 billion from $6.32 billion a year earlier. Sales in the U.S., the company’s biggest market, declined 3.3% due to reduced cheese and frozen potato shipments. Earnings…