10 Best Dividend-Paying Beverage Stocks to Buy

5. The Kraft Heinz Company (NASDAQ:KHC)

Number of Hedge Fund Holders: 38

Ranked at number 5 on our list of the Best Beverage Stocks with Dividends is The Kraft Heinz Company (NASDAQ:KHC), a globally trusted producer of high quality, great tasting, and nutritious food and beverages. Formed in 2015 through the merger of Kraft Foods Group and H.J. Heinz Holding Corporation, KHC is the third-largest food and beverage company in North America and the fifth-largest food and beverage company in the world.

The Kraft Heinz Company (NASDAQ:KHC) reported mixed results in Q4 2024, as its weaker sales figures were offset by profitability initiatives. The company declared adjusted EPS of $0.84, up $0.06 from market consensus, thanks largely to unexpected tax benefits and a reduced number of outstanding shares. However, the food and beverage giant’s Q4 revenue was reported at $6.58 billion, down 5% YoY and slightly below the forecasted $6.66 billion, due to declining organic sales. KHC witnessed its net sales decline by 3.9% YoY in the US, its primary revenue driver, despite a modest increase in pricing that slightly cushioned volume declines. The Chicago-based company reported a free cash flow of $3.2 billion for 2024, up 6% YoY, and returned $2.7 billion to its stockholders through share buybacks and dividends, which provide the highest yield in the food industry. KHC declared a quarterly dividend of $0.4 per share this month, in line with the previous.

Shares of The Kraft Heinz Company (NASDAQ:KHC) recently fell to a 52-week low after its management set up disappointing guidance for FY 2025. Due to unfavorable foreign currency trends, a price-sensitive consumer population, and rising ingredient costs, the company expects to generate full-year earnings of approximately $2.68 per share, down 12% YoY and short of the consensus consensus estimates of $3.04.

Mairs & Power stated the following regarding The Kraft Heinz Company (NASDAQ:KHC) in its Q3 2024 investor letter:

“We added The Kraft Heinz Company (NASDAQ:KHC) to the Fund in the quarter. Kraft Heinz is a leading global food company which possesses a portfolio of iconic brands, including its eponymous ketchup brand. The company has been undergoing an operational transformation focused on driving efficiency gains in supply chain, manufacturing and distribution. These efficiency gains have fueled increased investments in technology, automation, innovation and marketing, which should ultimately drive more consistent organic revenue growth and high single digit earnings per share growth. We expect above-average long-term returns, buoyed by consistent free cash flow generation, opportunistic share repurchases and an attractive 4-5% dividend yield. A modest current valuation affords an ample margin of safety.”