Conagra Brands (CAG) and Its Peers Critical Comparison

Conagra Brands (NYSE: CAG) is one of 46 publicly-traded companies in the “Food Processing” industry, but how does it weigh in compared to its peers? We will compare Conagra Brands to similar companies based on the strength of its institutional ownership, risk, valuation, earnings, dividends, analyst recommendations and profitability.

Institutional & Insider Ownership

79.3% of Conagra Brands shares are owned by institutional investors. Comparatively, 63.2% of shares of all “Food Processing” companies are owned by institutional investors. 0.8% of Conagra Brands shares are owned by company insiders. Comparatively, 11.2% of shares of all “Food Processing” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Conagra Brands and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Conagra Brands 7.83% 18.35% 7.29%
Conagra Brands Competitors 4.06% 10.96% 4.64%

Dividends

Conagra Brands pays an annual dividend of $0.85 per share and has a dividend yield of 2.4%. Conagra Brands pays out 60.3% of its earnings in the form of a dividend. As a group, “Food Processing” companies pay a dividend yield of 2.5% and pay out 59.1% of their earnings in the form of a dividend. Conagra Brands lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Valuation & Earnings

This table compares Conagra Brands and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Conagra Brands $7.83 billion $639.30 million 24.71
Conagra Brands Competitors $10.84 billion $602.95 million 386.91

Conagra Brands’ peers have higher revenue, but lower earnings than Conagra Brands. Conagra Brands is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Volatility and Risk

Conagra Brands has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500. Comparatively, Conagra Brands’ peers have a beta of 0.65, indicating that their average stock price is 35% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Conagra Brands and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Conagra Brands 1 1 8 0 2.70
Conagra Brands Competitors 285 1608 1930 53 2.45

Conagra Brands presently has a consensus price target of $40.78, indicating a potential upside of 17.04%. As a group, “Food Processing” companies have a potential downside of 1.12%. Given Conagra Brands’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Conagra Brands is more favorable than its peers.

Summary

Conagra Brands beats its peers on 8 of the 15 factors compared.

Conagra Brands Company Profile

Conagra Brands, Inc., formerly ConAgra Foods, Inc., operates as a packaged food company. The Company operates through two segments: Consumer Foods and Commercial Foods. The Company sells branded and customized food products, as well as commercially branded foods. It also supplies vegetable, spice and grain products to a range of restaurants, foodservice operators and commercial customers. Conagra Foodservice offers products to restaurants, retailers, commercial customers and other foodservice suppliers. The Company also operates in the countries outside the United States, such as Canada and Mexico. The Company’s brands include Marie Callender’s, Healthy Choice, Slim Jim, Hebrew National, Orville Redenbacher’s, Peter Pan, Reddi-wip, PAM, Snack Pack, Banquet, Chef Boyardee, Egg Beaters, Rosarita, Fleischmann’s and Hunt’s. The Company sells its products in grocery, convenience, mass merchandise and club stores.

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