6. The Kraft Heinz Company (NASDAQ:KHC)
Operating Cash Flow (TTM): $4.15 billion
The Kraft Heinz Company (NASDAQ:KHC) ranks sixth on our list of the cash-rich stocks that pay dividends. The American food company specializes in a wide range of snacks and beverages. The company delivered mixed earnings in the third quarter of 2024, despite having fallen short of investor expectations since its 2015 merger. In the third quarter of 2024, reported $6.38 billion in revenue, reflecting a 2.85% decline compared to the same period last year. However, the company’s gross profit margin improved by 20 basis points to 34.2%. Kraft Heinz continued to prioritize investments in marketing, research and development, and technology to deliver value-driven solutions for consumers and drive future revenue growth. These efforts are supported by its proven ability to optimize operations and maintain strong cash flow. In addition, the company remains committed to growing its established and emerging food and beverage brands on a global scale.
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.”
Income investors can find reassurance in the company’s strong cash position and set aside other concerns. The Kraft Heinz Company (NASDAQ:KHC) reported a solid cash generation in its latest quarter. Year-to-date operating cash flow rose to $2.8 billion, a 6.7% increase from the same period last year. Free cash flow totaled $2 billion, reflecting a 9.7% year-over-year growth. In addition, the company returned $1.5 billion to shareholders through dividends over the first nine months of the year. Currently, it pays a quarterly dividend of $0.40 per share and has an attractive dividend yield of 5.17%, as of December 16.
Warren Buffett’s Berkshire Hathaway was the company’s leading stakeholder in Q3 2024. In addition, Arrowstreet Capital increased its stake in the company by 31% during Q3. Overall, The Kraft Heinz Company (NASDAQ:KHC) was included in 38 hedge fund portfolios at the end of Q3 2024, as per Insider Monkey’s database, with a total stake value amounting to over $12 billion.
