CONAGRA BRANDS INC (CAG) Stock Fundamental Analysis
NYSE:CAG - New York Stock Exchange, Inc. - US2058871029 - Common Stock - Currency: USD
Taking everything into account, CAG scores 4 out of 10 in our fundamental rating. CAG was compared to 91 industry peers in the Food Products industry. There are concerns on the financial health of CAG while its profitability can be described as average. CAG is valued quite cheap, but it does not seem to be growing. CAG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year CAG was profitable.
CAG had a positive operating cash flow in the past year.
Each year in the past 5 years CAG has been profitable.
In the past 5 years CAG always reported a positive cash flow from operatings.
1.2 Ratios
CAG's Return On Assets of 1.59% is in line compared to the rest of the industry. CAG outperforms 42.86% of its industry peers.
CAG has a Return On Equity of 3.75%. This is comparable to the rest of the industry: CAG outperforms 42.86% of its industry peers.
CAG has a better Return On Invested Capital (7.97%) than 74.73% of its industry peers.
CAG had an Average Return On Invested Capital over the past 3 years of 7.89%. This is significantly below the industry average of 28.40%.
The last Return On Invested Capital (7.97%) for CAG is above the 3 year average (7.89%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.59% | ||
| ROE | 3.75% | ||
| ROIC | 7.97% |
ROA(3y)2.91%
ROA(5y)3.67%
ROE(3y)7.35%
ROE(5y)9.58%
ROIC(3y)7.89%
ROIC(5y)7.89%
1.3 Margins
The Profit Margin of CAG (2.80%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of CAG has declined.
CAG has a Operating Margin of 14.89%. This is amongst the best in the industry. CAG outperforms 84.62% of its industry peers.
CAG's Operating Margin has been stable in the last couple of years.
CAG has a Gross Margin of 26.61%. This is in the better half of the industry: CAG outperforms 62.64% of its industry peers.
In the last couple of years the Gross Margin of CAG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.89% | ||
| PM (TTM) | 2.8% | ||
| GM | 26.61% |
OM growth 3Y-3.57%
OM growth 5Y1.45%
PM growth 3Y-37.17%
PM growth 5Y-16.52%
GM growth 3Y-1.09%
GM growth 5Y-0.05%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CAG is still creating some value.
Compared to 1 year ago, CAG has more shares outstanding
The number of shares outstanding for CAG has been reduced compared to 5 years ago.
The debt/assets ratio for CAG has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.72, we must say that CAG is in the distress zone and has some risk of bankruptcy.
CAG has a Altman-Z score of 1.72. This is comparable to the rest of the industry: CAG outperforms 45.05% of its industry peers.
The Debt to FCF ratio of CAG is 5.62, which is a neutral value as it means it would take CAG, 5.62 years of fcf income to pay off all of its debts.
CAG has a Debt to FCF ratio of 5.62. This is in the better half of the industry: CAG outperforms 79.12% of its industry peers.
A Debt/Equity ratio of 0.81 indicates that CAG is somewhat dependend on debt financing.
CAG has a Debt to Equity ratio of 0.81. This is in the lower half of the industry: CAG underperforms 65.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.81 | ||
| Debt/FCF | 5.62 | ||
| Altman-Z | 1.72 |
ROIC/WACC1.2
WACC6.64%
2.3 Liquidity
CAG has a Current Ratio of 0.69. This is a bad value and indicates that CAG is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of CAG (0.69) is worse than 82.42% of its industry peers.
A Quick Ratio of 0.23 indicates that CAG may have some problems paying its short term obligations.
CAG has a worse Quick ratio (0.23) than 93.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.23 |
3. Growth
3.1 Past
CAG shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -12.31%.
Measured over the past 5 years, CAG shows a small growth in Earnings Per Share. The EPS has been growing by 5.84% on average per year.
The Revenue has decreased by -3.15% in the past year.
CAG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.79% yearly.
EPS 1Y (TTM)-12.31%
EPS 3Y0.38%
EPS 5Y5.84%
EPS Q2Q%-26.09%
Revenue 1Y (TTM)-3.15%
Revenue growth 3Y2.52%
Revenue growth 5Y4.79%
Sales Q2Q%-6.33%
3.2 Future
CAG is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -1.11% yearly.
The Revenue is expected to decrease by -0.24% on average over the next years.
EPS Next Y-11.89%
EPS Next 2Y-6.79%
EPS Next 3Y-3.07%
EPS Next 5Y-1.11%
Revenue Next Year-3.24%
Revenue Next 2Y-1.76%
Revenue Next 3Y-1.21%
Revenue Next 5Y-0.24%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 8.93, the valuation of CAG can be described as very reasonable.
Based on the Price/Earnings ratio, CAG is valued cheaply inside the industry as 84.62% of the companies are valued more expensively.
CAG is valuated cheaply when we compare the Price/Earnings ratio to 27.45, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 9.05, which indicates a very decent valuation of CAG.
94.51% of the companies in the same industry are more expensive than CAG, based on the Price/Forward Earnings ratio.
CAG is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.93 | ||
| Fwd PE | 9.05 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CAG indicates a somewhat cheap valuation: CAG is cheaper than 70.33% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, CAG is valued cheaper than 91.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.92 | ||
| EV/EBITDA | 8.01 |
4.3 Compensation for Growth
The decent profitability rating of CAG may justify a higher PE ratio.
CAG's earnings are expected to decrease with -3.07% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.53
EPS Next 2Y-6.79%
EPS Next 3Y-3.07%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.67%, CAG is a good candidate for dividend investing.
The stock price of CAG dropped by -21.33% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
CAG's Dividend Yield is rather good when compared to the industry average which is at 4.67. CAG pays more dividend than 90.11% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, CAG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.67% |
5.2 History
The dividend of CAG is nicely growing with an annual growth rate of 11.19%!
CAG has paid a dividend for at least 10 years, which is a reliable track record.
CAG has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.19%
Div Incr Years5
Div Non Decr Years17
5.3 Sustainability
203.43% of the earnings are spent on dividend by CAG. This is not a sustainable payout ratio.
The Dividend Rate of CAG has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP203.43%
EPS Next 2Y-6.79%
EPS Next 3Y-3.07%
20.99
-0.15 (-0.71%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners87.94%
Inst Owner Change0.37%
Ins Owners0.53%
Ins Owner Change0.81%
Market Cap10.02B
Analysts55.38
Price Target25.29 (20.49%)
Short Float %3.49%
Short Ratio2.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.67% |
Yearly Dividend1.38
Dividend Growth(5Y)11.19%
DP203.43%
Div Incr Years5
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.78%
Min EPS beat(2)-4.3%
Max EPS beat(2)2.74%
EPS beat(4)2
Avg EPS beat(4)-1.98%
Min EPS beat(4)-11.84%
Max EPS beat(4)5.47%
EPS beat(8)6
Avg EPS beat(8)1.62%
EPS beat(12)10
Avg EPS beat(12)5.1%
EPS beat(16)12
Avg EPS beat(16)3.71%
Revenue beat(2)1
Avg Revenue beat(2)-1.33%
Min Revenue beat(2)-3.1%
Max Revenue beat(2)0.44%
Revenue beat(4)1
Avg Revenue beat(4)-1.81%
Min Revenue beat(4)-3.1%
Max Revenue beat(4)0.44%
Revenue beat(8)1
Avg Revenue beat(8)-1.74%
Revenue beat(12)2
Avg Revenue beat(12)-1.3%
Revenue beat(16)5
Avg Revenue beat(16)-0.63%
PT rev (1m)-9.12%
PT rev (3m)-10.29%
EPS NQ rev (1m)-0.78%
EPS NQ rev (3m)0.02%
EPS NY rev (1m)-0.29%
EPS NY rev (3m)-1.63%
Revenue NQ rev (1m)-0.72%
Revenue NQ rev (3m)-0.42%
Revenue NY rev (1m)-0.15%
Revenue NY rev (3m)-0.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.93 | ||
| Fwd PE | 9.05 | ||
| P/S | 0.85 | ||
| P/FCF | 6.92 | ||
| P/OCF | 5.47 | ||
| P/B | 1.14 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.01 |
EPS(TTM)2.35
EY11.2%
EPS(NY)2.32
Fwd EY11.05%
FCF(TTM)3.03
FCFY14.46%
OCF(TTM)3.84
OCFY18.28%
SpS24.59
BVpS18.39
TBVpS-8.81
PEG (NY)N/A
PEG (5Y)1.53
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.59% | ||
| ROE | 3.75% | ||
| ROCE | 10.63% | ||
| ROIC | 7.97% | ||
| ROICexc | 8% | ||
| ROICexgc | 32.25% | ||
| OM | 14.89% | ||
| PM (TTM) | 2.8% | ||
| GM | 26.61% | ||
| FCFM | 12.34% |
ROA(3y)2.91%
ROA(5y)3.67%
ROE(3y)7.35%
ROE(5y)9.58%
ROIC(3y)7.89%
ROIC(5y)7.89%
ROICexc(3y)7.92%
ROICexc(5y)7.96%
ROICexgc(3y)35.02%
ROICexgc(5y)39.72%
ROCE(3y)10.33%
ROCE(5y)10.27%
ROICexcg growth 3Y-9.41%
ROICexcg growth 5Y-0.75%
ROICexc growth 3Y0.69%
ROICexc growth 5Y7.83%
OM growth 3Y-3.57%
OM growth 5Y1.45%
PM growth 3Y-37.17%
PM growth 5Y-16.52%
GM growth 3Y-1.09%
GM growth 5Y-0.05%
F-Score6
Asset Turnover0.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.81 | ||
| Debt/FCF | 5.62 | ||
| Debt/EBITDA | 3.31 | ||
| Cap/Depr | 94.7% | ||
| Cap/Sales | 3.26% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 85.09% | ||
| Profit Quality | 440.17% | ||
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.23 | ||
| Altman-Z | 1.72 |
F-Score6
WACC6.64%
ROIC/WACC1.2
Cap/Depr(3y)106.15%
Cap/Depr(5y)108.81%
Cap/Sales(3y)3.4%
Cap/Sales(5y)3.61%
Profit Quality(3y)213.8%
Profit Quality(5y)178.16%
High Growth Momentum
Growth
EPS 1Y (TTM)-12.31%
EPS 3Y0.38%
EPS 5Y5.84%
EPS Q2Q%-26.09%
EPS Next Y-11.89%
EPS Next 2Y-6.79%
EPS Next 3Y-3.07%
EPS Next 5Y-1.11%
Revenue 1Y (TTM)-3.15%
Revenue growth 3Y2.52%
Revenue growth 5Y4.79%
Sales Q2Q%-6.33%
Revenue Next Year-3.24%
Revenue Next 2Y-1.76%
Revenue Next 3Y-1.21%
Revenue Next 5Y-0.24%
EBIT growth 1Y-9.64%
EBIT growth 3Y-1.14%
EBIT growth 5Y6.31%
EBIT Next Year12.48%
EBIT Next 3Y4.63%
EBIT Next 5Y3.96%
FCF growth 1Y90.48%
FCF growth 3Y19.15%
FCF growth 5Y16.06%
OCF growth 1Y62.33%
OCF growth 3Y11.13%
OCF growth 5Y12.35%