10 Cheap Value Stocks to Invest in According to Warren Buffett

3. The Kraft Heinz Company (NASDAQ:KHC)

Forward Price to Earnings Ratio: 9.15

Berkshire Hathaway Stake Value: $11.43 Billion

Number of Hedge Fund Holders: 38

The Kraft Heinz Company (NASDAQ:KHC) is a packaged foods company that manufactures and markets food and beverage products. Its products include condiments and sauces, cheese and dairy products. While the stock was down by about 24% in 2024, its fortunes have received a significant increase in the aftermath of the Fed cutting interest rates. The cuts positively impact consumer purchasing power by reducing borrowing costs.

The Kraft Heinz Company (NASDAQ:KHC) is well-known for its wide range of well-known food and drink brands, which include Philadelphia, Heinz, Kraft, and Jell-O, among many others. The company has a devoted global customer base thanks to its reputation for producing high-quality food products. Wall Street predicts Kraft Heinz will return to its previous level of profitability with steady, low-single-digit growth. The growth would be fueled by strong consumer spending demand amid a resilient US economy.

The company currently stands out as a cheap value stock to invest in owing to its 5.39% dividend yield, which is above the industry average of 4%.

Mairs & Power also highlighted efforts made by The Kraft Heinz Company (NASDAQ:KHC) in its Q3 2024 investor letter. Here is what the firm has to say:

“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.”