Is Kellogg 'Great,' Or Just OK?
By Fiver Capital:Kellogg (K) has spent the last 100 years building its brand presence. From Tony the Tiger to the Keebler Elves to Snap, Crackle and Pop, Kellog makes some of the most enduring names ever with international sales accounting for about one-third of revenue.
Trending consistently higher, earnings per share have averaged growth of 6.1% annually for the last three years. While gross margins have been pressured by rising input costs, net margins have remained steady. Margins are above average for the industry. Kellogg’s Earnings per Share
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
1.16 1.75 1.92 2.14 2.36 2.51 2.76 2.99 3.16 3.30
Great businesses typically generate strong cash flows and require little debt financing. I like to see long-term debt less than three times current net earnings. With long-term debt of $5.5 billion and trailing 12-month net income of $1.2 billion, Kellogg’s debt givesComplete Story »