Shareholders of HJ Heinz stock ( HNZ , quote ) are enjoying appetizing results due to greater sales to emerging market consumers.
[caption align="alignright" caption="A taste for Heinz is rapidly growing in Brazil, Indonesia and China"] [/caption]
Known mostly for its ketchup, Heinz has a vast array of product lines that appeal to emerging market customers including frozen foods, soups, beans, infant nutrition and pasta meals. Like Kraft Foods ( KFT , quote ) in India, Heinz has benefited from more revenues coming in from emerging markets . Product sales for Heinz in China, Indonesia and Brazil have more than doubled over the past six years.
Companies like Heinz and Kraft are well positioned with wide economic moats to profit from the continued growth in emerging markets. By the year 2025, the emerging market consumer class is projected to be spending $30 billion annually, according to a recent report by global consulting firm McKinsey & Co., about half the global total. Much of that will go towards food items.
As a populace becomes more affluent, more is spent on a richer diet. Items such as ketchup and other condiments are in greater demand. The booming sales of Heinz products in Brazil, Indonesia and China, and greater sales of Kraft in India is proof of that. This will continue as the emerging market middle class cgrew even during the Great Recession.
Now trading around $55.95 a share, the mean analyst target price for Heinz stock over the next year of market action is $57.19. The dividend of 3.68% adds to the total return. With a beta of just 0.52, Heinz stock is very stable. Research has revealed that low beta stocks return more over the long term due to low beta stocks being the most attractive, so not as much selling takes place. The high level of institutional ownership in Heinz stock contributes to its bullish long term outlook.
In recent trading the trend has been the friend of shareholders in Heinz stock -- it's above its 20-day, 50-day and 200-day moving averages.