Conagra Brands Inc. (NYSE: CAG)

Sector: Consumer Defensive Industry: Packaged Foods CIK: 0000023217
Market Cap 9.02 Bn
P/B 1.01
P/E 10.61
P/S 0.79
ROIC (Qtr) 2.01
Div Yield % 9.26
Rev 1y % (Qtr) -6.76
Total Debt (Qtr) 7.62 Bn
Debt/Equity (Qtr) 0.94
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About

Conagra Brands, Inc., often recognized by its stock symbol CAG, is a prominent player in the North American food industry. Established in 1919, the company has built a reputation for producing high-quality food products. Conagra's diverse portfolio includes renowned brands such as Birds Eye, Duncan Hines, Healthy Choice, Marie Callender's, Reddi-wip, and Slim Jim, among others. Conagra Brands operates primarily in the business of manufacturing and selling branded, value-added consumer food products, as well as foodservice items and ingredients....

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Investment thesis

Bull case

  • Operating cash flow of 1.27B provides strong 28.32x coverage of stock compensation 44.80M, indicating sustainable incentive practices.
  • Robust free cash flow of 914.90M exceeds capital expenditure of 354M by 2.58x, indicating strong organic growth funding capability.
  • Tangible assets of 7.61B provide robust 8.20x coverage of other current liabilities 927.90M, indicating strong asset backing.
  • Retained earnings of 5.92B provide strong 6.38x coverage of other current liabilities 927.90M, indicating earnings quality.
  • Strong tangible asset base of 7.61B provides 11.73x coverage of acquisition spending 648.90M, enabling strategic growth.

Bear case

  • With cash reserves of 46.60M against inventory of 2.20B, the 0.02 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 1.27B provides thin coverage of dividend payments of (668.90M) with a -1.90 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 46.60M provide limited coverage of acquisition spending of 648.90M, which is 0.07x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 508.50M show weak coverage of depreciation charges of 385.90M, with a 1.32 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 914.90M represents just -1.07x of debt issuance (851.80M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments Breakdown of Revenue (2025)

Product and Service Breakdown of Revenue (2025)

Peer comparison

Companies in the Packaged Foods
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 KHC Kraft Heinz Co 28.20 Bn -4.82 1.13 21.22 Bn
2 GIS General Mills Inc 26.99 Bn 20.72 1.54 13.73 Bn
3 JBS Jbs N.V. 17.81 Bn 10.08 0.23 23.92 Bn
4 MKC Mccormick & Co Inc 16.10 Bn 44.21 3.77 4.00 Bn
5 HRL Hormel Foods Corp /De/ 12.37 Bn 18.03 1.34 2.86 Bn
6 SJM J M SMUCKER Co 11.08 Bn 19.60 1.97 7.91 Bn
7 PPC Pilgrims Pride Corp 10.32 Bn 9.54 0.56 3.29 Bn
8 MICC Magnum Ice Cream Co N.V. 9.71 Bn 28.17 1.04 4.02 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.87 1.47
EV to Cash from Ops. EV/CFO 11.02 29.75
EV to Debt EV to Debt 2.23 27.85
EV to EBIT EV/EBIT 11.18 86.88
EV to EBITDA EV/EBITDA 9.95 -156.20
EV to Free Cash Flow [EV/FCF] EV/FCF 14.80 -5.67
EV to Market Cap EV to Market Cap 1.89 1.15
EV to Revenue EV/Rev 1.49 7.32
Price to Book Value [P/B] P/B 1.01 8.48
Price to Earnings [P/E] P/E 10.61 14.45
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -0.15 4.58
Dividend Payout Ratio % Div Payout % (Qtr) -666.70 3.76
Dividend per Basic Share Div per Share (Qtr) 1.40 0.65
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 73.18 22.76
Interest Coverage Int. cover (Qtr) 1.30 6.64
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 8.41 -118.07
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 24.60 43.48
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 0.66
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -146.09 -48.16
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -37.61 -152.35
EBIT Growth (1y) % EBIT 1y % (Qtr) -43.61 -50.79
EBT Growth (1y) % EBT 1y % (Qtr) -75.66 -54.94
EPS Growth (1y) % EPS 1y % (Qtr) -120.39 -28.10
FCF Growth (1y) % FCF 1y % (Qtr) -40.15 7.02
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -15.25 439.70
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.57 1.01
Cash Payout Ratio Cash Payout (Qtr) 0.41 0.12
Cash Ratio Cash Ratio (Qtr) 0.01 0.86
Current Ratio Curr Ratio (Qtr) 0.89 2.60
Debt to Equity Ratio Debt/Equity (Qtr) 0.94 2.21
Interest Cover Ratio Int Coverage (Qtr) 1.30 6.64
Times Interest Earned Times Interest Earned (Qtr) 1.30 6.64
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 8.00 -919.13
EBIT Margin % EBIT Margin % (Qtr) 4.53 -1,474.87
EBT Margin % EBT Margin % (Qtr) 1.03 -1,537.76
Gross Margin % Gross Margin % (Qtr) 24.50 26.98
Net Profit Margin % Net Margin % (Qtr) -0.90 -1,538.60