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Stocks you can buy and hold forever must be resilient businesses, with the staying power to last decades. The problem is that these no-brainer winners are seldom cheap. Kraft Heinz (NASDAQ: KHC), down a whopping 67% from its high, looks like a rare deal.

However, blue chip stocks like Kraft Heinz don't lose over half their value by accident; the company has battled through some serious challenges that prospective investors should know about first. Kraft Heinz is emerging from the rubble after some tough years, making now the perfect time to consider buying the S&P 500 stock before sentiment turns positive and this eye-popping bargain disappears.

Why did Kraft Heinz slip so far?

Kraft Heinz has been down so long that most people probably forgot what a great business it can be. The stock peaked in 2017, and you must venture into the past to discover what happened.

Kraft Heinz was created in the summer of 2015 by a massive merger between Kraft and Heinz. Warren Buffett and a private equity firm helped arrange the deal. The goal was to create a food products juggernaut, but there have been problems.

The merger dumped tons of debt on the company's balance sheet. All that debt put the company in emergency cost-cutting mode, including a dividend cut, slashed expenses throughout the business, and a crumbling return on invested capital. The lack of spending on innovation caused Kraft Heinz to fall behind consumers' tastes, and sales declined.

You can see Kraft Heinz's fundamentals deteriorating in the chart. The stock fell sharply between 2017 and 2019, drifting along for most of the past several years.

What Kraft Heinz offers investors today

Investors willing to pick up the pieces and look closer will find a magnificent business getting back on its feet.

For starters, Kraft Heinz still has a strong stable of brands that consumers know and love. In addition to its namesake Kraft and Heinz brands, the company owns several winners, such as Capri-Sun, Velveeta, Philadelphia, Kool-Aid, Jell-O, Smart Ones, Oscar Mayer, Ore-Ida, and more.

Kraft Heinz has also spent several years paying down roughly $12 billion in debt and has regained investment-grade credit from corporate rating agencies.

Importantly, management has focused on investing more in new products and increasing efficiency to improve margins. The company expects as much as 2% organic sales growth for 2024 and unit sales to turn positive in the year's second half. Analysts believe Kraft Heinz will compound revenue at a low-single-digit rate starting next year, and earnings will grow between 5% and 6% annually.

Remember that dividend cut? The stock has fallen so far that even that smaller payout yields a whopping 5% at today's share price. The dividend payout ratio is healthy -- just over half the company's estimated 2024 earnings.

The business is turning in the right direction, even if it has taken years. Perhaps that's why Buffett's Berkshire Hathaway still owns its shares.

Shares are still sitting on the bargain shelf.

Wall Street is sleeping on Kraft Heinz's turnaround story. Today, shares are trading for a forward P/E of just 10.5.

Suppose the stock gets no love, and Kraft Heinz grows earnings by 5% or 6% annually. The stock's valuation can stand still, and Kraft Heinz could still produce between 10% and 11% total annual returns from growth and dividends alone. However, the stock could do far better if the market begins to award a higher valuation to Kraft Heinz as growth returns and the balance sheet improve.

If the stock rises to 15 times earnings, there's almost a 50% upside, which doesn't seem too much to ask. Peers like PepsiCo, though much healthier companies today, trade at 20 times earnings.

Kraft Heinz must continue to perform well. There's no guarantee the market will embrace the stock. But it could be a mistake to ignore the good things bubbling underneath the surface at the company.

Should you invest $1,000 in Kraft Heinz right now?

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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Kraft Heinz. 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.