Contrasting Kellogg (K) and ConAgra Foods (NYSE:CAG)

Kellogg (NYSE: K) and ConAgra Foods (NYSE:CAG) are both large-cap consumer staples companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitabiliy, earnings and institutional ownership.

Valuation and Earnings

This table compares Kellogg and ConAgra Foods’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kellogg $12.87 billion 1.82 $2.26 billion $2.20 30.34
ConAgra Foods $7.83 billion 1.80 $1.25 billion $1.47 22.78

Kellogg has higher revenue and earnings than ConAgra Foods. ConAgra Foods is trading at a lower price-to-earnings ratio than Kellogg, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

83.3% of Kellogg shares are held by institutional investors. Comparatively, 75.9% of ConAgra Foods shares are held by institutional investors. 1.3% of Kellogg shares are held by insiders. Comparatively, 0.6% of ConAgra Foods shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Kellogg and ConAgra Foods’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kellogg 6.07% 67.99% 9.05%
ConAgra Foods 7.43% 20.29% 7.56%

Dividends

Kellogg pays an annual dividend of $2.08 per share and has a dividend yield of 3.1%. ConAgra Foods pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. Kellogg pays out 94.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ConAgra Foods pays out 54.4% of its earnings in the form of a dividend. ConAgra Foods has raised its dividend for 12 consecutive years.

Volatility & Risk

Kellogg has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, ConAgra Foods has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Kellogg and ConAgra Foods, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kellogg 1 8 2 0 2.09
ConAgra Foods 1 2 7 0 2.60

Kellogg currently has a consensus price target of $79.40, indicating a potential upside of 18.95%. ConAgra Foods has a consensus price target of $43.90, indicating a potential upside of 31.12%. Given ConAgra Foods’ stronger consensus rating and higher probable upside, analysts plainly believe ConAgra Foods is more favorable than Kellogg.

Summary

Kellogg beats ConAgra Foods on 11 of the 17 factors compared between the two stocks.

Kellogg Company Profile

Kellogg Company is a manufacturer and marketer of ready-to-eat cereal and convenience foods. The Company’s principal products are ready-to-eat cereals and convenience foods, such as cookies, crackers, savory snacks, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles and veggie foods. Its segments include U.S. Morning Foods, which includes cereal, toaster pastries, health and wellness bars, and beverages; U.S. Snacks, which includes cookies, crackers, cereal bars, savory snacks and fruit-flavored snacks; U.S. Specialty, which represents food away from home channels, including food service, convenience, vending, Girl Scouts and food manufacturing; North America Other, which includes the U.S. Frozen, Kashi and Canada operating segments; Europe, which consists of European countries; Latin America, which consists of Central and South America and includes Mexico, and Asia Pacific, which consists of Sub-Saharan Africa, Australia and other Asian and Pacific markets.

ConAgra Foods 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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