3 Reasons to Buy Kraft


The following video is part of our "Motley Fool Conversations" series, in which consumer goods editor/analyst Austin Smith discusses topics across the investing world.

In today's edition, Austin gives investors three reasons to considering buying shares of Kraft today. He cites its upcoming spin-off, which many analysts believe will unlock value; potential efficiencies gained from restructuring; and its shareholder-friendly dividend as just three bullish catalysts. With a 3% dividend yield, Kraft certainly qualifies as market-topping, but the company still trails some of its peers in the packaged food space. Fortunately for the patient investor, once Kraft is split into two companies, its domestic grocery division is likely to be a dividend powerhouse. Management has indicated that a generous dividend will be a priority for the division and will likely rise to meet (if not match) other packaged good companies in the space.

As good as its 3% yield is, the fact that it could have been better kept Kraft off our list of nine incredible dividends. You can learn about the companies that made the cut -- just click here to read our special free report.

At the time thisarticle was published Austin Smithowns shares of Philip Morris International. The Motley Fool has no positions in the stocks mentioned above.Motley Fool newsletter services recommendPhilip Morris International. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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