Warren Buffett's Hand-Picked Successor, Greg Abel, Revamped Berkshire Hathaway's Portfolio. Should You Buy the Only Berkshire Dividend Stock Left That Yields Over 6%?
2026-07-15 11:15
•Robert Izquierdo •The Motley Fool
•••••••• ••••••• Axe Capital view
Kraft Heinz: Buffett’s Dividend Play in Transition
Berkshire Hathaway supports Kraft Heinz’s turnaround with hefty R&D bets, but near-term margin pain looms.
Greg Abel’s Berkshire is shaking things up, moving aggressively into tech but still backing Kraft Heinz—a dividend stock yielding over 6%. That alone puts Kraft Heinz in rare company, especially with many packaged food firms struggling. The new CEO’s pivot to beef up research and development alongside marketing signals a real attempt to modernise a brand stuck in the past. Yet this kind of reset usually bites into profits early on, pressuring margins. For South African investors, a fading Kraft Heinz dividend would push yield-seekers to local banks like Standard Bank and Capitec, which offer steadier dividends and clearer growth paths. Kraft Heinz’s valuation looks inviting, but the turnaround isn’t guaranteed. If consumer tastes continue shifting faster than Kraft adapts, even Berkshire’s backing might not be enough. Holding Kraft Heinz is a bet on patience and big shareholder faith, not a quick win. this is just my opinion and not financial advice
Watch Kraft Heinz for a potential entry on dividend yield, but trim if margin pressure deepens. Prefer Standard Bank for more reliable dividend income and growth.
- KHC
- Standard Bank
- Consumer tastes shift faster than turnaround
- Margin pressure heavier than expected
6/10
Greg Abel, Warren Buffett's successor at Berkshire Hathaway, has revamped the company's portfolio by adding tech stocks like Alphabet while maintaining a position in Kraft Heinz, which offers a 6%+ dividend yield. Kraft Heinz, once a grocery staple, faced declining sales due to shifting consumer preferences toward healthier foods and underinvestment in R&D. New CEO Steve Cahillane scrapped a controversial breakup plan in favor of a growth strategy involving $600 million in R&D and marketing investments. While margins will be pressured short-term, the turnaround effort has Berkshire's support and the stock trades at a low valuation.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Robert Izquierdo
Categories: Rates, Equities, Capital Returns, Technology, AI, Semiconductors, Consumer, Retail
Tickers: KHC, BRK.A, BRK.B, GOOG, GOOGL, GOOGM, GOOGN
Sentiment: Positive - New leadership and strategic pivot toward R&D and marketing investment signal turnaround potential. Strong free cash flow supports dividend sustainability. Low valuation (P/S ratio of 1.2) and Berkshire Hathaway's continued support indicate confidence in long-term recovery prospects, despite near-term margin pressures. Portfolio restructuring under new leadership shows strategic shift toward tech/AI while maintaining selective positions like Kraft Heinz. No specific performance concerns mentioned, but the article focuses on portfolio changes rather than Berkshire's overall performance.
Keywords: Kraft Heinz turnaround, dividend yield, Berkshire Hathaway portfolio, Greg Abel, packaged food industry, consumer preferences, R&D investment
Insights:
- KHC: Positive: New leadership and strategic pivot toward R&D and marketing investment signal turnaround potential. Strong free cash flow supports dividend sustainability. Low valuation (P/S ratio of 1.2) and Berkshire Hathaway's continued support indicate confidence in long-term recovery prospects, despite near-term margin pressures.
- BRK.A: Neutral: Portfolio restructuring under new leadership shows strategic shift toward tech/AI while maintaining selective positions like Kraft Heinz. No specific performance concerns mentioned, but the article focuses on portfolio changes rather than Berkshire's overall performance.
- BRK.B: Neutral: Portfolio restructuring under new leadership shows strategic shift toward tech/AI while maintaining selective positions like Kraft Heinz. No specific performance concerns mentioned, but the article focuses on portfolio changes rather than Berkshire's overall performance.