The Company in a Nutshell
- Conagra cut its dividends a few years ago. Since then, the company has focus on its brands.
- After a huge clean-up of its business model, CAG raised its payout in 2017.
- The acquisition of Pinnacle Foods will help CAG becoming #2 in the domestic frozen food industry.
- We do not cover Conagra Brands at the moment
Date Reviewed | N/A |
Company Name | Conagra Brands Inc |
Symbol | CAG |
Sector | Consumer Staples |
Industry | Packaged Foods |
Beta | 0.305 |
PRO Rating | 3 |
Dividend Safety | 4 |
Business Model
Conagra Brands, Inc. is a consumer-packaged goods food company. The Company’s segments include Grocery & Snacks that includes branded, shelf-stable food products sold in various retail channels in the United States; Refrigerated & Frozen segment includes branded, temperature-controlled food products sold in various retail channels in the United States; International segment principally includes branded food products in various temperature states, sold in various retail and foodservice channels outside of the United States, and Foodservice segment includes branded and customized food products, including meals, entrees, sauces, and a variety of custom-manufactured culinary products packaged for sale to restaurants and other foodservice establishments primarily in the United States. Its brands include Birds Eye, Duncan Hines, Healthy Choice, Marie Callender’s, Reddi-wip, and BOOMCHICKAPOP. It also offers FATTY Smoked Meat Sticks made with quality pork and beef smoked with hickory wood.
Current price | 32.4 |
ROE | 4.05 % |
ROIC | 4.35 % |
Shareholder Yield | 0.50 % |
5-Yr Total Return | 32.15 % |
1-Yr Total Return | 19.65 % |
Next Earnings Date | 10-02-24 |
Latest Quarter Information
What the CEO said:
Sean Connolly, president and chief executive officer of Conagra Brands (CAG), commented, "Our investments in our brands continued to yield results, and again drove volume improvement in our Domestic Retail business. Progress was most notable in our key Frozen and Snacks domains, where we also saw market share gains. Additionally, our supply chain productivity initiatives enabled us to expand adjusted gross margins, and we continued to strengthen the balance sheet and reduce our net leverage ratio."
What we say:
05-06-2024. Conagra Q3’24 sales fell 1.7%, with a 2% decline in organic sales, as volumes declined due to continued lower consumption. Adjusted EPS of $0.69 was down 9.2% vs. Q3’23. Gross profit was up 2.4% as higher productivity exceeded the effects of lower organic sales, cost of goods sold inflation, and negative operating leverage. Gross margin rose 114 bps to 28.3%. SG&A expenses grew 11% to $387M mainly from higher incentive compensation and a 6.5% rise in advertising and promotional expenses (A&P). Operating margin was 15.5%, 33 bps lower than in Q3’23. CAG raised its fiscal 2024 guidance for adjusted operating margin and reaffirmed it for organic sales and adjusted EPS.
Investment Thesis
Dividend Triangle
5-Yr Rev. Growth | 4.80 % |
5-Yr EPS Growth | -13.90 % |
5-Yr Div Growth | 10.50 % |
Potential Risks
Debt/Equity | 1.00 |
Financial Debt to EBITDA (TTM) | 3.60 |
Current Ratio (Quarterly) | 0.95 |
Credit Score | 50 |
Dividend Growth Perspective
Dividend ($) | 1.4 |
Dividend Yield Fwd | 4.30 % |
Dividend Frequency | Quarterly |
Average 5-Yr Yield | 3.75 % |
Payout Ratio (%) | 192.75 |
Cash Payout Ratio (%) | 40.50 |
DGR 1-Yr | 6.05 |
DGR 3-Yr | 10.50 |
DGR 5-Yr | 10.50 |
DGR Streak | |
Chowder Score | 14.75 |
Next DVD PMT | 08-29-24 |
Valuation
(Data for `ddm_recent_annual_dividend` field are missing to build DDM tables)
Video Tutorial: How to Read the Stock Cards DDM Valuation
Market Cap | 16 B |
PE Ratio | 45.40 |
Fwd PE | 12.40 |
Price to Book Ratio | 1.85 |
DDM Valuation | N/A |
Average 5-Yr PE | 19.18 |
Value Score | 76 |
- All financial metrics are updated weekly.
- The DSR PRO rating and Dividend Safety Score are updated quarterly.
- The analysis (investment thesis, risk potential, dividend growth perspective and DDM calculation) is reviewed every 6 months.
- The PDF format includes only comments (no metrics) and is reviewed every 6 months.