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Linked here is a detailed quantitative analysis of Kellogg Company (K). Below are some highlights from the above linked analysis:

Company Description: Kellogg Company is a leading producer of ready-to-eat cereal also sells snack and convenience foods such as cookies, crackers, potato chips, cereal bars, fruit snacks and frozen waffles.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

K is trading at a premium to all four valuations above. Since K's tangible book value is not meaningful, a Graham number can not be calculated. When also considering the NPV MMA Differential, the stock is trading at a 265.5% premium to its calculated fair value of $22.68. K did not earn any Stars in this section.

Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:

1. Free Cash Flow Payout
2. Debt To Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%

K earned no Stars in this section. The company has paid a cash dividend to shareholders every year since 1923 and has increased its dividend payments for 0 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to > MMA

The negative NPV MMA Diff. means that on a NPV basis the dividend earnings from an investment in K would be less than a similar amount invested in MMA earning a 20-year average rate of 3.75%. If K grows its dividend at 0.0% per year, it will never equal a MMA yielding an estimated 20-year average rate of 3.75%.

Peers: The company’s peer group includes Campbell Soup Company (CPB) with a 4.0% yield, General Mills, Inc. (GIS) with a 3.9% yield, and The Hershey Company (HSY) with a 3.1% yield.

Conclusion: K did not earn any Stars in the Fair Value section, did not earn any Stars in the Dividend Analytical Data section and did not earn any Stars in the Dividend Income vs. MMA section for a total of zero Star. This quantitatively ranks K as a 0-Star Avoid stock.

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