Kraft Foods Inc. (KFT), the international conglomerate and maker of such iconic food brands as Ritz crackers and Oreo cookies, is one of the best-known food companies in the world. I don't know an American family that hasn't purchased one of this company's brand-name products. This year, the company has worked hard to improve its margins, especially in Europe (where it successfully completed the purchase of British candy maker Cadbury) and strived to lower expenses. However, weak sales in the United States the company's overall sales. In evaluating KFT's fundamentals, my screens give the company a C rating, an average score.

NEXT: Sales Growth Grade »

Kraft's second-quarter net sales were $12.25 billion, up an excellent 25% from the $9.78 billion it recorded during the same period in 2009. Sales for the food giant are up substantially and my evaluation screens have assigned a B grade for sales growth–a good score. However, KFT faces intense competition in the consumer foods segment. In fact, sales for the company in the United States are beginning to level off but are being offset by respectable growth in Europe for the company's brands. Additionally, Kraft's sales will be helped in the coming quarters as a result of its successful and hard-fought acquisition of Britain's legendary Cadbury chocolate company.

NEXT: Earnings Growth Grade »

KFT posted second-quarter net earnings of $937 million, or $0.60 per share, compared with $827 million, or $0.56 per share, for the same period in 2009, a 13% increase. Analysts were expecting earnings per share of $0.52, so this result beat Wall Street's expectations and provided a 15% earnings surprise. While the company met my earnings expectations, Kraft continues to face intense competition where margins already are razor thin. And with the economy slowing down, my evaluation screens assign only an average C grade for earnings growth for this multinational food conglomerate.

NEXT: Quantitative Grade »

My evaluation screens assign Kraft a Quantitative score of B–an above average score. The Quant. score is the most powerful of my ratings variables and indicates that the short- to mid-term buying pressure on this stock is good. Analysts are expecting earnings per share for this blue chip giant of $0.48 in the third quarter of this year and $0.46 in the fourth quarter. The reason for the dip is the expected slowdown in the economy as we head into the last quarter of this year and the predicted deceleration of the stock market. Kraft has a market capitalization of $51.31 billion.

NEXT: Total Grade »

My proprietary analysis of Kraft Foods Inc.'s (KFT) stock results in a total grade of B–another good rating. While the company's products remain some of the most diverse and well-known in the marketplace, KFT faces intense competition with little room to increase its prices and, hence, its income. And as the economy slows, sales and earnings pressures certainly will mount on this Illinois-based company. Still, the company has excellent brands. If you have money that you are looking to invest, KFT should be on your list. I will continue to monitor this competitive consumer sector and should marketplace conditions change, I will adjust my ratings for the Oreo cookie maker.

NEXT: Fundamental Grade »

See Full Stock Report »