July 16, 2025 a 07:47 am
CAG: Dividend Analysis - Conagra Brands, Inc.
Conagra Brands, Inc. presents a compelling dividend profile with a substantial yield, a long and consistent history of dividend payments, and a moderate growth rate. Investors might find the robust yield and stability appealing, though the payout ratios suggest a vigilant approach to future earnings and cash flow generation. The company’s agility in managing payout levels while providing consistent returns marks it as a resilient option in the consumer goods sector.
📊 Overview
| Sector | Dividend Yield | Current Dividend per Share | Dividend History | Last Cut or Suspension |
|---|---|---|---|---|
| Consumer Goods | 9.21% | 1.4 USD | 41 years | None |
🗣️ Dividend History
The extensive dividend history of Conagra Brands reflects a commitment to returning value to its shareholders. A 41-year span without cuts signifies the company's stable financial health, essential for long-term investors focused on income generation.
| Year | Dividend per Share |
|---|---|
| 2025 | 1.05 USD |
| 2024 | 1.40 USD |
| 2023 | 1.36 USD |
| 2022 | 1.285 USD |
| 2021 | 1.175 USD |
📈 Dividend Growth
The dividend growth rate, modest but steady, reflects the company's methodical approach to increasing shareholder value. Consistent growth over the years instills investor confidence in Conagra's commitment to maintaining competitive returns.
| Time | Growth |
|---|---|
| 3 years | 6.01% |
| 5 years | 10.49% |
The average dividend growth is 10.49% over 5 years. This shows moderate but steady dividend growth.
⚠️ Payout Ratio
Payout ratios are crucial indicators of dividend sustainability. Conagra's ratios indicate a balanced approach, with room for growth yet implying a necessity for caution if earnings decline.
| Key Figure | Ratio |
|---|---|
| EPS-based | 58.09% |
| Free cash flow-based | 46.17% |
The EPS-based ratio of 58.09% is healthy, suggesting sufficient earnings coverage, while an FCF ratio of 46.17% indicates solid cash flow backing.
✅ Cashflow & Capital Efficiency
The company's effective management of cash flow and capital is reflected in various efficiency metrics, outlining its ability to generate returns from invested capital and maintain capital expenditures proportionately.
| Year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Free Cash Flow Yield | 3.80% | 11.23% | - |
| Earnings Yield | 4.10% | 2.40% | 10.76% |
| CAPEX to Operating Cash Flow | 36.39% | 19.25% | - |
| Stock-based Compensation to Revenue | 0.65% | 0.26% | - |
| Free Cash Flow / Operating Cash Flow Ratio | 63.61% | 80.75% | - |
These metrics highlight the company's flexibility in capital allocation and commitment to shareholder returns, especially evident in consistent free cash flow generation.
📉 Balance Sheet & Leverage Analysis
Evaluating leverage and liquidity ratios allows us to assess Conagra’s ability to manage and repay its debt obligations. Key leverage metrics are vital for understanding potential financial strain in downturns.
| Year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Debt-to-Equity | 107.81% | 102.05% | - |
| Debt-to-Assets | 42.71% | 41.29% | - |
| Debt-to-Capital | 51.88% | 50.51% | - |
| Net Debt to EBITDA | 5.53 | 5.90 | - |
| Current Ratio | 76.23% | 97.15% | - |
| Quick Ratio | 26.41% | 32.90% | - |
| Financial Leverage | 2.52 | 2.47 | - |
The stable leverage ratios indicate disciplined debt management. However, the high net debt to EBITDA warrants attention, suggesting that ongoing debt reduction efforts are crucial for financial resilience.
🔍 Fundamental Strength & Profitability
Profitability ratios demonstrate Conagra’s efficiency in generating income relative to revenue, equity, and assets, essential for long-term value creation.
| Year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Return on Equity | 7.82% | 4.13% | - |
| Return on Assets | 3.10% | 1.66% | - |
| Margins: Net | 5.57% | 2.88% | 9.92% |
| Margins: EBIT | - | 8.68% | - |
| Margins: EBITDA | 13.73% | 12.01% | 11.75% |
| Margins: Gross | 26.59% | 27.66% | 25.86% |
| R&D to Revenue | 0% | 0% | 0% |
Despite R&D expenses being absent, which may affect future growth potential, solid profitability metrics highlight operational efficiency and shareholder value focus.
📈 Price Development
🛡️ Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend yield | 5 | |
| Dividend Stability | 5 | |
| Dividend growth | 3 | |
| Payout ratio | 4 | |
| Financial stability | 3 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 3 |
Overall Score: 31/40
🏆 Rating
Conagra Brands, Inc. is a solid choice for dividend-focused investors seeking strong income through a high yield and impressive dividend history. While growth rates are moderate, the enduring stability of payouts and current financial positioning suggest limited risk under stable economic conditions. Investors should monitor debt levels and keep an eye on cash flow consistency for sustained confidence in earnings coverage.