Financial Comparison: Conagra Brands (CAG) and Penford (PENX)

Conagra Brands (NYSE: CAG) and Penford (NASDAQ:PENX) are both consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, profitability, valuation and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
Conagra Brands 9.04% 19.58% 7.62%
Penford 2.06% 8.92% 3.56%

Risk & Volatility

Conagra Brands has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500. Comparatively, Penford has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.

Insider & Institutional Ownership

79.6% of Conagra Brands shares are held by institutional investors. 0.8% of Conagra Brands shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Conagra Brands and Penford, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Conagra Brands 0 2 7 0 2.78
Penford 0 0 0 0 N/A

Conagra Brands currently has a consensus target price of $41.56, suggesting a potential upside of 16.86%. Given Conagra Brands’ higher probable upside, analysts plainly believe Conagra Brands is more favorable than Penford.

Earnings & Valuation

This table compares Conagra Brands and Penford’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Conagra Brands $7.83 billion 1.82 $639.30 million $1.67 21.29
Penford N/A N/A N/A $0.72 26.36

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

Dividends

Conagra Brands pays an annual dividend of $0.85 per share and has a dividend yield of 2.4%. Penford does not pay a dividend. Conagra Brands pays out 50.9% of its earnings in the form of a dividend.

Summary

Conagra Brands beats Penford on 10 of the 13 factors compared between the two stocks.

About Conagra Brands

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.

About Penford

Penford Corporation (Penford) is a developer, manufacturer and marketer of natural-based ingredient systems for food and industrial applications, including fuel grade ethanol. The Company has research and development capabilities, which are used in understanding the complex chemistry of carbohydrate-based materials and in developing applications to address customer needs. Penford operates in two business segments: Industrial Ingredients and Food Ingredients. Industrial Ingredients segment is a supplier of chemically modified starches to the paper and packaging industries. Industrial Ingredients also produces food grade corn starch for sale by the Company’s Food Ingredients business. Food Ingredients segment is a developer and manufacturer of specialty starches and dextrins to the food manufacturing and food service industries. This business is engaged is in leveraging the inherent characteristics from potato, corn, tapioca and rice to help improve its customers’ product performance.

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