This Looks Like the Perfect Stock for Warren Buffett and Greg Abel to Buy Right Now

Key Points

• The Kraft Heinz merger didn’t work out as well as Warren Buffett had hoped.

• Kraft and Heinz were both struggling businesses when they merged.

• McCormick is an industry-leading spice and flavor company looking to acquire Uliver’s industry-leading food brands.

• 10 stocks we like better than McCormick ›

Greg Abel took over the CEO job at Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) from Warren Buffett at the start of 2026. He’s already proven to be a more proactive manager when it comes to the stocks Berkshire Hathaway owns and businesses it buys. One interesting move was his behind-the-scenes push to stop Kraft Heinz (NASDAQ: KHC) from splitting up its business. Despite the troubles Kraft Heinz has faced, Abel should still consider buying into McCormick (NYSE: MKC) and its planned acquisition.

One mistake is not a reason to avoid all consumer staples mergers

The Kraft Heinz merger was backed by Buffett, and it didn’t work out well. But there was a problem with the deal from day one. Both Kraft and Heinz were bloated companies struggling to get back on track. The entire purpose of the merger was to simply cut costs, which is fine to a point. However, the consumer staples space is driven by innovation and advertising. Kraft Heinz focused so much on cost-cutting that it stopped being an innovative company. And advertising wasn’t spared in the cost-cutting effort, either.

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Despite the less-than-desirable outcome with Kraft Heinz, Abel is pushing the company’s new leadership team to right the ship before splitting the business in two again. Two bad companies are no better than one bad company. Despite Kraft Heinz’s troubles, Abel should consider buying McCormick, as it is looking to acquire Unilever‘s (NYSE: UL) food business.

A big deal and a unique opportunity

This is a very large transaction for McCormick, as it will roughly double the company’s size. Investors are worried about the transaction, noting that McCormick’s stock fell on the news. It rose as investors digested the story, but then tumbled around 15% as the scope of the deal came into focus. While the shares have recovered after a solid quarterly earnings update, the stock has basically gone nowhere since the acquisition announcement.

So there’s still time for Abel to buy McCormick while it offers a historically high 3.7% yield and a historically low price-to-earnings ratio of roughly 9x. The big opportunity for Abel is helping to finance the transaction, which could allow him to buy preferred stock, a share type that Buffett used to great effect with Bank of America (NYSE: BAC) when the giant bank needed cash.

The key to the story, however, is that McCormick isn’t a struggling consumer staples company. It is an industry leader in spices and flavors. Unilever’s food business, which is largely made up of Hellmann’s and Knorr, is also well run. Helping two good businesses come together is a far more compelling investment opportunity than merging businesses solely to cut costs.

Abel has plenty of firepower

Berkshire Hathaway ended the first quarter of 2026 with nearly $400 billion in cash on its balance sheet. McCormick’s deal with Unilever will require it to raise roughly $16 billion in cash. That’s a drop in the bucket for Berkshire Hathaway, but it could get the company into an industry-leading consumer staples business that’s on the verge of buying a long-term growth catalyst. Just because Kraft Heinz didn’t work out, it doesn’t mean McCormick’s transformative deal won’t be a success.

Should you buy stock in McCormick right now?

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Bank of America is an advertising partner of Motley Fool Money. Reuben Gregg Brewer has positions in McCormick and Unilever. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Kraft Heinz, McCormick, and Unilever. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.