Wednesday, March 25, 2015

Thank you KRAFT!!!


As many already know Kraft (KRFT) is merging with Heinz to become the Kraft Heinz Company. The new company will become the third-largest food company in North America. The best part of the news aside from a jump in shareholder value is that Warren Buffett is involved in the deal.

Kraft shareholders will receive a 49% stake in the new company and will also receive a special $16.50 dividend. KRFT is currently trading up about $23 a share from about $61 to over $84. This represents a 37% increase over yesterday's close. This obviously is the pre-dividend price.

Since I currently own 75 shares, my special dividend amount will be $1237.50.

While this is only a one time dividend, it comes at an excellent time considering my yearly dividends were cut buy $632 thanks to ESV. It is also nice to have good news while I continue to buy energy companies and weather the storm on that side of my portfolio.

DEFY MEDIOCRITY

45 comments:

  1. Dont know much about this yet. Will KRFT keep trading or will it just be absorbed into Heinz ? Id hate to try and find something to replace the dividends i get from KRFT.

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    Replies
    1. Anonymous,

      I can't find any links. On CNBC it was mentioned that KRFT shareholders would get 1 share of the new company for every 1 share of KRFT. Hopefully the dividend stays the same. I will probably hold my shares until after the merger is complete and then make a decision from there.

      MDP

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    2. The new company will keep the dividend at the current KRFT level of $0.55/share per quarter.

      http://files.shareholder.com/downloads/ABEA-3QV6OO/4151425295x0x817718/bb5a3884-b3ad-4249-9fc6-5af812a1a437/Kraft_Heinz_News_Release_2015-03-25.pdf

      Delete
  2. Yeah, buddy! That's what I'm talking about. Another reason diversified portfolios are great: one slip is covered up by a major win. Net/net is business as usual. Good stuff.

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    1. BGH,

      Absolutely!! I love that a boring food company like KRFT can step up to the plate and deliver just as well as the big boys. KRFT was definitely the buoy in my portfolio today!

      MDP

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  3. That's a wicked ass news! Awesome news for you MDP. Wished I bought some. Up up and away. Keep up the hustle bustle. Take care.

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    Replies
    1. DH,

      No shit. I wish I had added more myself. I'll take the special dividend and use it to buy more income producers.

      MDP

      Delete
  4. Replies
    1. GYFG,

      It's amazing how well this worked out for me. I was worried about receiving $16k in dividends this year and now it should be a piece of cake with Kraft accounting for almost 10% by itself! Now I probably need to try to hit $17k.

      MDP

      Delete
  5. Awesome news for you indeed!

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    1. Tawcan,

      I'll take awesome news any way I can get it. Even it this didn't happen, I would still keep my head down and adding to the portfolio.

      MDP

      Delete
  6. Awesome news on teh special dividend. Congrats!

    R2R

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    Replies
    1. R2R,

      There was a real chance that I would not have an organic increase in dividends this year with the ESV cut, but now I should be in great shape!

      MDP

      Delete
  7. Looks like a good day for you! Haha! Happy collecting!

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    1. DG,

      Yeah I think even with a 300 pt drop in the Dow, my portfolio may stay even on the day. That shows how powerful KRFT was today! Energy names went up as well....finally.

      MDP

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  8. I'm quite happy to be a shareholder too. I was even prepared to buy more under $60. When i saw the preliminary news yesterday, i thought the company would go private and was wondering what i would replace Kraft with. They plan to continue paying, and increasing, the dividend. So i plan to sit tight!

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    1. ADY,

      I am going to sit tight as well. It is good seeing the company maintain its current dividend and the special dividend is just gravy.

      MDP

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  9. I am super stoked about being long KRFT right now too. Any idea when the merge will complete and we will see that cash? I've been searching all over, and no dice on any dates.

    Still its damn fine news,
    Gremlin

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    Replies
    1. DG,

      I have no idea when the deal will finalize. I thought I heard the second half of this year, but I don't know the month. Hopefully soon! It's good to see a few other owners of KRFT. The company isn't a favorite among most dividend investors.

      MDP

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  10. Excellent news! I too was worried I would have to replace KRFT with another holding but now it looks like I may hold this baby forever.

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    Replies
    1. Captain,

      I am going to hold on as well. I don't have many defensive names within my portfolio so KRFT is a keeper in my book.

      MDP

      Delete
  11. Man, wish I had purchased more KRFT earlier. I only have a small bit in my Loyal3 portfolio but after the huge jump I don't know if I'll be adding more. Love this though since the company is staying public. Great special dividend too.

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    1. PIP,

      I probably will not add any more right now, but I would like to add a few more defensive names to my portfolio. I may continue adding KO or possibly one of the other food companies.

      MDP

      Delete
  12. MDP,

    Was definitely eager to see the deals when the news broke yesterday. I own a little bit over 26 shares, so a nice $429 extra is going to be solid + don't we get shares into the new company?

    -Lanny

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    Replies
    1. Lanny,

      That is correct. A big dividend and ownership in the newly created company. That is super sweet!!!

      MDP

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  13. My wife told me to buy KRFT about 3 weeks ago... Needless to say, I won't be telling her about this jump! Last thing I need is her to say she was right again haha

    Wish I had bought some but ohh well. That is a hefty payout you'll be getting right there!!! Congrats

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    Replies
    1. ADD,

      Haha the old I told you so from the Mrs. I get those all the time...sometimes even when she didn't tell me so. :-)

      MDP

      Delete
  14. Good to see that you had a nice move in your shares. Good luck.

    Keep cranking,

    Robert the DividendDreamer

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    Replies
    1. Robert,

      Thanks. This special dividend came in timely fashion and now my 2016 dividends are back on track even with the ESV cut. I'll still have to work on building up my forward dividends from here.

      MDP

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  15. MDP,

    Awesome news. That definitely makes up for the ESV troubles. :)

    Enjoy that huge special dividend. Nothing like a fresh cash infusion.

    Cheers!

    ReplyDelete
    Replies
    1. DM,

      It's crazy how that happened. I was really worried about trying to make up ground for this year. Now I will refocus on building up my long term dividends from here.

      MDP

      Delete
  16. Great news, MPD. I felt a little left out, but so glad that good people like you get to reap the rewards!!! Looking forward to seeing that massive special dividend hit your account :)

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    Replies
    1. Ryan,

      Don't feel left out. Keep building up your portfolio like you have been. You are on the right track and making amazing progress.

      MDP

      Delete
  17. MDP,

    Congrats on that great news. On top of the 1 time dividend, you will continue to hold share in the combined company and continue to get the dividend. It is great. Unfortunately for me, I don't own KRFT. But one can't have them all I guess :)

    DGJ

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    Replies
    1. DGJ,

      Yeah I am kind of relieved that I don't have to replace Kraft with another purchase. I plan on keeping the new company and maybe adding more shares down the road.

      MDP

      Delete
  18. Great shot! Had KRFT on my watchlist 3 weeks ago but decided to buy others. But I'm lucky for everyone who is participate now. Rgds, Patrick

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    Replies
    1. MD,

      It's a tough call sometimes not pulling the trigger. A year and a half ago I ignored DPS and DRI and they both have soared since. Can't win them all.

      MDP

      Delete
  19. MDP,

    Congrats on owning KRFT. I was looking at them several times, but never did pull the trigger. That is good that judging from the above comments there will be a publicly traded company to collect the dividends from still. I am going to have to research more info on it.

    Nice job!

    ReplyDelete
    Replies
    1. DSI,

      Thanks it is nice to see a bit of good news from one of my holdings especially while I run the gauntlet of buying energy companies.

      MDP

      Delete
  20. MDP,

    Congrats on the special dividend and associated shot in the arm for the portfolio due to the price increase. I own a fractional amount so the celebration is muted here but it does illustrate that investing in high quality companies can pay off in a variety of different ways. Keep up the great work and I look forward to reading what you buy with that mega dividend later this year.

    FD

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    1. FD,

      Thanks for stopping by. I am exciting about receiving the dividend. Kraft is not in a Drip account so I will most likely add to an existing position or maybe buy a couple of years worth of cheese!

      MDP

      Delete
  21. I was super happy as well since I own some KRFT although not as much as you. I've been thinking about selling it if it ever reaches to $100 since it would be considered over valued. Many analyst thinks the fair value is around $90. I wouldn't be surprise if it reaches $100 in next few weeks with the ways it's going. I would definitely buy back after the ex dividend though. That being said I prefer the buy and hold forever approach so it's been a struggle for me on what to do.

    Will you sell yours if it goes to $100?

    ReplyDelete
    Replies
    1. Anonymous,

      That's a good question about selling Kraft. I might sell it and possibly one or two of my short term holdings that's in the red. I really don't like selling companies, but I would like to adjust my portfolio and selling Kraft along with maybe MAT and some ESV would allow me to reallocate to more stable holdings.

      I will continue to monitor the situation.

      MDP

      Delete
  22. MDP,

    I was waiting for the first posts with happy Kraft owners to pop up on my feed! Glad to hear you're among them.

    Enjoy the special dividend and let us know what you'll be using it for,
    NMW

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    Replies
    1. NMW,

      Thanks! I plan on using the special dividend to create even more dividends by reinvesting the proceeds. The snowball must keep growing!!!

      MDP

      Delete