Conagra Brands has struggled since spinning off Lamb Weston, with shares down 35% over the past eight years. Conagra's stock has entered deep value territory, trading at just 10x forward earnings while offering a 5.8% dividend yield. The company has struggled to grow revenues and is facing operational challenges, but the current price now reflects those headwinds.
The market didn't find the stock of Conagra Brands (CAG -5.46%) very tasty on the first trading day of the week after the holiday weekend. On the back of significantly lowered guidance, investors collectively traded out of the veteran packaged foods company to the point where the shares lost almost 6% of their value.
Food giant cites inventory problems with frozen meals containing chicken, as well as with frozen vegetables.
CAG updates fiscal 2025 outlook, highlighting challenges, growth strategies and long-term plans.
While inflation has fallen from the high of prior years, Conagra Brands (CAG) says that a strong U.S. dollar, a frugal U.S. consumer and supply chain disruptions hurt its margins. Jenny Horne has the latest on why Conagra isn't the only food company facing headwinds.
While the recent inflation data is undoubtedly far better than the 9.1% increase printed in the summer of 2022, many Americans still face the reality that prices for everyday necessities like food, energy, and other necessities remain very elevated.
Blue chip dividend stocks are shares of large, well-established companies considered less risky and more financially stable than other stocks. They are often industry leaders with strong brand names and reputations and a history of consistent growth.
The average consumer staples company is offering investors a roughly 2.8% dividend yield. Conagra's (CAG 0.32%) 5.1% yield is much higher than that, with Kraft Heinz's (KHC -0.31%) 5.4% yield higher still.
Consumer staples are known for their stability during market volatility, as demand for essential goods remains consistent. With speculation around the Trump administration's tariffs and potential price hikes, consumer-focused stocks, including traditional staples and other consumer-driven names, may look increasingly attractive.
Conagra Brands offers a high 5.4% dividend yield, well-covered by a 55% payout ratio, presenting an attractive entry point for value and income investors. Despite recent challenges, CAG shows signs of a turnaround with improving shipment volumes, organic sales growth, and a rising market share in its portfolio. CAG's focus on innovation, such as the GLP-1-friendly Healthy Choice line, positions it well to capitalize on emerging consumer trends and drive future growth.
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The recent inflation data is undoubtedly far better than the 9.1% increase reported in the summer of 2022.