Kraft Heinz Stock And 2 Consumer Staples Picks For Sticky Inflation

Inflation is back in focus, with the latest Fed report pointing to headline PCE at 4.1% and core at 3.4%, along with pressure from energy prices and AI related demand. That mix can make it harder to judge which consumer staples stocks might hold up if inflation stays firm and policy becomes tighter. This article looks at three stocks from an Inflation Resistant Consumer Staples Stocks screener that appear closely tied to these trends. The goal is to help you think through whether each stock might be worth further research or a pass, given the current backdrop.

MGP Ingredients (MGPI)

Overview: MGP Ingredients is a US$353.7m producer of distilled and branded spirits such as bourbon, rye, tequila and vodka, alongside specialty food ingredients like wheat starches and proteins that are sold to food manufacturers and bakeries worldwide.

Operations: MGP Ingredients generates most of its revenue from Branded Spirits at about US$229m, with additional contributions from Distilling Solutions at roughly US$162m and Ingredient Solutions at around US$130m.

Market Cap: US$353.7m

MGP Ingredients may be of interest if you are looking for a consumer staples stock that could be relatively resilient in an environment of persistent inflation, because it sells alcohol and food ingredients that can remain in demand when prices stay high and has shown an ability to manage higher corn, wheat and energy costs through risk management and premium products. At the same time, the company is working through challenges, including a recent quarterly loss, higher debt, a dividend that is not covered by current earnings and insider selling that might indicate some caution. The combination of potential undervaluation, expectations for a return to profitability, and these balance sheet and governance risks is what makes MGP Ingredients a candidate for closer review in this screener.

MGP Ingredients sits at the crossroads of premium spirits and staple food ingredients, yet the real story may lie in how its balance sheet and cash flows stack up against those ambitions, so it is worth reading the MGP Ingredients financial health report

Inghams Group (ASX:ING)

Overview: Inghams Group is a poultry producer that supplies chicken and turkey products under the Ingham’s brand to supermarkets, quick service restaurants and foodservice customers across Australia and New Zealand, and also produces stockfeed for the poultry and pig industries.

Operations: Inghams Group generates A$3.2b in revenue primarily from supplying feed and poultry industry products, with around A$2.7b from Australia and A$496.3m from New Zealand.

Market Cap: A$788.0m

Inghams Group stands out in an inflation focused consumer staples screen because poultry is a core grocery basket item and the company sells into large supermarket chains that tend to see steady demand when households cut back elsewhere. At the same time, earnings have been under pressure, margins are thin at 1.8%, leverage is doing a lot of the work behind the high forecast ROE and interest cover is not comfortable. Investors therefore need to weigh the potential upside that analysts see against balance sheet and competitive risks. Recent appointments of an experienced CFO and a director with deep supermarket and agribusiness experience suggest Inghams Group is trying to tighten execution just as inflation and rate uncertainty keep the focus on dependable food suppliers.

Inghams Group’s thin margins and high forecast ROE hint at a story where tight execution could matter far more than it first appears, so it is worth reading the analyst forecasts for Inghams Group

Kraft Heinz (KHC)

Overview: Kraft Heinz is a global packaged food company that sells everyday staples such as ketchup, sauces, cheese, meats, snacks, drinks and desserts under well known brands including Heinz, Kraft, Oscar Mayer, Philadelphia, Jell-O and Capri Sun to supermarkets, foodservice customers and online retailers worldwide.

Operations: Kraft Heinz generates most of its revenue in North America at about US$18.6b, with additional contributions of roughly US$3.6b from International Developed Markets and around US$2.9b from Emerging Markets.

Market Cap: US$29.3b

Kraft Heinz appears in this inflation focused consumer staples screen because it combines globally recognised brands with pricing power in categories many households treat as essentials, at a time when the Fed has highlighted persistent inflation and higher-for-longer rates. Management commentary refers to ongoing inflation in inputs like coffee and dairy, as well as to cost efficiencies and hedging efforts aimed at protecting margins while still funding brand investment. At the same time, the company is addressing unprofitable periods, high debt, slower forecast revenue growth and a dividend that is not fully covered by current earnings, which raises questions about how much room there is for error. For investors, the focus is on whether Kraft Heinz can continue to translate free cash flow generation and brand strength into a durable turnaround in an environment of elevated inflation.

Kraft Heinz looks like a cash flow engine trying to repair old scars, so the real edge is understanding whether the turnaround story and the debt load truly match up with the analysis report for Kraft Heinz

The three consumer staples stocks covered here are just a starting point, and the full Inflation-Resistant Consumer Staples Stocks screener highlights 16 more companies with equally compelling inflation related stories that you have not seen yet. Use Simply Wall St to identify, filter and analyze the specific catalysts, balance sheet strength, cash flow trends and dividend profiles discussed here so you can focus on the highest conviction ideas for your own watchlist.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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