Since taking a tumble back in June, ConAgra Foods’ (CAG) share price has been on a steady climb. With an upcoming ex-dividend date, is now a good time to buy CAG?
Company Profile
ConAgra Foods’ claim to fame is that its products are found in 97% of American households. This isn’t surprising, considering that this company produces everything from Hunt’s ketchup to Orville Redenbacher’s popcorn to Pam cooking spray. ConAgra is the fourth largest player in the Processed & Packaged Goods industry.
ConAgra Foods employs 33,000 people and brought in $17.7 billion in sales last year. In early 2013, ConAgra completed its buyout of Ralcorp Holdings (RAH), making the combined company one of the largest packaged food players on the continent.
Dividend and Earnings Buzz
ConAgra is scheduled to release its second quarter earnings on Dec. 18. The analyst community estimates that ConAgra will report 61 cents earnings-per-share, a 1.6% decrease from the same time last year. Analysts also estimate that revenue for the quarter will be $4.19 billion, a 11% decline over last year. So, ConAgra Foods has clearly stagnated in terms of growth for the current quarter.
However, things are looking up for ConAgra; the EPS growth expectation for the year is 3.7%. ConAgra is also set to go ex-dividend tomorrow, Oct. 29. Shareholders of record will receive 25 cents per share on Dec. 2. At current prices, CAG pays a generous 2.94% dividend yield.
Current Ratings
CAG stumbled earlier this year as buying pressure severely weakened, but the stock has rebounded considerably in recent months. Currently, CAG receives a “B” for its Quantitative Grade.
Meanwhile, ConAgra’s fundamentals are somewhat mixed. While ConAgra receives solid marks for return on equity (B), analyst earnings revisions (B) and earnings surprises (B), there are other areas where there’s room for improvement. Sales growth, earnings growth, and cash flow all earn “D” grades. Operating margin growth and earnings momentum both fail with “F-ratings.” CAG receives a “C” for its overall fundamentals.
As of this posting, Oct. 28, I consider CAG a “B-rated buy.”
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
