H.J. Heinz Company (HNZ), ConAgra Foods, Inc. (CAG), Kraft Foods Group Inc (KRFT): Three Consumer Goods Companies and the Issues Ahead

I am very optimistic about Kraft Foods Group Inc (NASDAQ:KRFT)’s 2012-2014 restructuring program. Its efficiency improvement and cost-reduction initiatives will liberate important cash to be used in more innovation and brand-building investments. Management is focused on building cash flow, and plans to dedicate it to pay strong dividends as well, which is always a good sign for investors. Kraft Foods Group Inc (NASDAQ:KRFT)’s 2.5% annual net productivity savings target is key.

Bottom line

The acquisition of H.J. Heinz Company (NYSE:HNZ) validates the company’s solid organic growth, improvements in the emerging markets, cost saving initiatives, and strategic direction. Warren Buffett would not invest in a company without value potential.

ConAgra Foods, Inc. (NYSE:CAG) lacks substantial overseas presence and has not announced plans to expand these operations. I remain neutral on the stock, as a downturn in the American economy could affect the company’s revenue.

Kraft Foods Group Inc (NASDAQ:KRFT)’s bottom-line improvements are encouraging, but the company still requires work on improving its top-line growth a bit more. I will remain neutral on this stock until I see improvements on this front.

The article 3 Consumer Goods Companies and the Issues Ahead originally appeared on Fool.com and is written by Damian Illia.

Damian Illia has no position in any stocks mentioned. The Motley Fool recommends H.J. Heinz Company. Damian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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