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

Dividends

Kellogg Company pays an annual dividend of $2.08 per share and has a dividend yield of 2.9%. ConAgra Foods pays an annual dividend of $0.80 per share and has a dividend yield of 2.1%. Kellogg Company 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 58.0% of its earnings in the form of a dividend. ConAgra Foods has increased its dividend for 12 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Kellogg Company 6.07% 67.99% 9.05%
ConAgra Foods 6.33% 22.41% 7.64%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Kellogg Company and ConAgra Foods, as provided by MarketBeat.

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

Kellogg Company currently has a consensus target price of $81.33, indicating a potential upside of 14.41%. ConAgra Foods has a consensus target price of $45.44, indicating a potential upside of 20.32%. Given ConAgra Foods’ stronger consensus rating and higher possible upside, analysts plainly believe ConAgra Foods is more favorable than Kellogg Company.

Insider & Institutional Ownership

83.7% of Kellogg Company shares are owned by institutional investors. Comparatively, 77.8% of ConAgra Foods shares are owned by institutional investors. 1.3% of Kellogg Company shares are owned by insiders. Comparatively, 0.6% of ConAgra Foods shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Kellogg Company and ConAgra Foods’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kellogg Company $12.87 billion 1.93 $2.26 billion $2.20 32.31
ConAgra Foods $11.00 billion 1.46 $1.86 billion $1.38 27.37

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

Risk and Volatility

Kellogg Company has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500. Comparatively, ConAgra Foods has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500.

Summary

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

About Kellogg Company

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.

About ConAgra Foods

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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