Contrasting BRF (NYSE:BRFS) & Conagra Brands (NYSE:CAG)

Conagra Brands (NYSE:CAG) and BRF (NYSE:BRFS) are both mid-cap consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Insider & Institutional Ownership

83.8% of Conagra Brands shares are held by institutional investors. Comparatively, 4.8% of BRF shares are held by institutional investors. 0.6% of Conagra Brands shares are held by company insiders. Comparatively, 1.0% of BRF shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Conagra Brands pays an annual dividend of $1.40 per share and has a dividend yield of 7.3%. BRF pays an annual dividend of $0.08 per share and has a dividend yield of 2.2%. Conagra Brands pays out 58.6% of its earnings in the form of a dividend. BRF pays out 21.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Conagra Brands has raised its dividend for 5 consecutive years. Conagra Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Conagra Brands has a beta of 0.08, suggesting that its share price is 92% less volatile than the S&P 500. Comparatively, BRF has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500.

Profitability

This table compares Conagra Brands and BRF’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Conagra Brands	9.92%	12.52%	5.25%
BRF	5.84%	20.20%	5.62%

Valuation and Earnings

This table compares Conagra Brands and BRF”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Conagra Brands	$11.61 billion	0.79	$1.15 billion	$2.39	8.05
BRF	$63.95 billion	0.06	$595.74 million	$0.38	9.51

Conagra Brands has higher earnings, but lower revenue than BRF. Conagra Brands is trading at a lower price-to-earnings ratio than BRF, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Conagra Brands and BRF, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Conagra Brands	2	9	1	1	2.08
BRF	0	1	0	1	3.00

Conagra Brands currently has a consensus price target of $22.5833, suggesting a potential upside of 17.35%. BRF has a consensus price target of $3.50, suggesting a potential downside of 3.18%. Given Conagra Brands’ higher probable upside, analysts clearly believe Conagra Brands is more favorable than BRF.

Summary

Conagra Brands beats BRF on 9 of the 17 factors compared between the two stocks.

About Conagra Brands

Conagra Brands, Inc., together with its subsidiaries, operates as a consumer packaged goods food company primarily in the United States. The company operates through Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice segments. The Grocery & Snacks segment primarily offers shelf stable food products through various retail channels. The Refrigerated & Frozen segment provides temperature-controlled food products through various retail channels. The International segment offers food products in various temperature states through retail and foodservice channels outside of the United States. The Foodservice segment offers branded and customized food products, including meals, entrees, sauces, and various custom-manufactured culinary products packaged for restaurants and other foodservice establishments. The company sells its products under the Birds Eye, Marie Callender's, Duncan Hines, Healthy Choice, Slim Jim, Reddi-wip, Angie's, BOOMCHICKAPOP, Duke's, Earth Balance, Gardein, and Frontera brands. The company was incorporated in 1919 and is headquartered in Chicago, Illinois.

About BRF

BRF S.A. raises, produces, and slaughters poultry and pork for processing, production, and sale of fresh meat, processed products, pasta, margarine, pet food, and other products. The company provides frozen whole and cut chicken, frozen pork, and turkey, and halal products for Islamic markets; processed foods, such as marinated, frozen, seasoned whole, and cut chicken, roosters, sausages, ham products, bologna, frankfurters, salamis, bacons, cold meats, and other smoked products; and hamburgers, steaks, breaded meat products, kibbeh, and meatballs, as well as chicken sausages, hot dogs, and chicken bologna. It produces and sells lasagna, macaroni and cheese, pies, ready-to-eat meals, pizzas, and other frozen foods; plant-based products, such as nuggets, pies, vegetables, and burgers; frozen desserts and cheese bread; margarine, butter, cream cheese, sweet specialties, sandwiches, and pate, as well as soy meal, refined soy flour, animal feed, pet food and hatcheries. The company sells its products under the Sadia, Perdigão, Qualy, Sadia Halal, Chester, BRF Ingredients, Kidelli, Perdix, Borella, Hilal, Balance, Onefoods, Banvit, Deline, Sadia Bio, Sadia Salamitos, Sadia Veg&Tal, Sadia Livre&Lev, Sadia Hot Pocket, Perdigão Ouro, Chester Perdigão, Perdigão NaBrasa, Claybom, Biofresh, Three Dogs, Three Cats, and Gran Plus brands. It serves supermarkets, wholesalers, retail and wholesale stores, restaurants, and other institutional buyers. The company provides consultancy, administrative, marketing, and logistics services; generates and commercializes electric energy; distributes nutrients for animals; veterinary activities; road freight; and imports, exports, industrializes, and commercializes of products, as well as real estate. The company was formerly known as BRF-Brasil Foods S.A. and changed its name to BRF S.A. in April 2013. BRF S.A. was founded in 1934 and is headquartered in São Paulo, Brazil. BRF S.A. operates as a subsidiary of Marfrig Global Foods S.A.