December 20, 2025 a 03:31 pm
CAG: Dividend Analysis - Conagra Brands, Inc.
Conagra Brands, Inc. offers an attractive dividend yield of over 8%, reflective of a robust payout policy backed by a long history. Despite recent performance challenges, Conagra remains committed to returning value to shareholders through dividends. Investors should evaluate sustainability given high payout ratios and a recent suspension in 2026.
📊 Overview
Conagra Brands is a long-standing player in the Consumer Packaged Goods sector, exhibiting a remarkable dividend yield of 8.04%. The company provides a current dividend of $1.40 per share, maintaining a commendable track record of 42 years of dividend payments. However, a recent cut in 2026 raises concerns about future consistency.
| Metric | Value |
|---|---|
| Sector | Consumer Packaged Goods |
| Dividend yield | 8.04 % |
| Current dividend per share | 1.40 USD |
| Dividend history | 42 years |
| Last cut or suspension | 2026 |
🗣️ Dividend History
The rich dividend history of Conagra demonstrates its commitment to rewarding shareholders. However, investors should note the impact of the recent cut on credibility. History is pivotal in gauging future performance reliability.
| Year | Dividend per Share (USD) |
|---|---|
| 2026 | 0.35 |
| 2025 | 1.40 |
| 2024 | 1.40 |
| 2023 | 1.36 |
| 2022 | 1.2850 |
📈 Dividend Growth
Over recent years, Conagra has shown moderate dividend growth, with a 3-year average growth of 0.06% and a 5-year rate of 0.10%. This trend reflects a steady yet cautious approach towards distribution increments.
| 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
Conagra's payout ratios are telling of its financial strategy. The EPS-based payout ratio stands at an alarmingly high 1007%, indicative of unsustainable dividend strategies if continued. Meanwhile, a more stable FCF-based ratio of 58.67% suggests better cash flow coverage.
| Key figure | Ratio |
|---|---|
| EPS-based | 1007 % |
| Free cash flow-based | 58.67 % |
The exceedingly high EPS ratio suggests risk concerning profitability, whereas FCF shows more prudent financial balance.
✅ Cashflow & Capital Efficiency
Cash flow and capital efficiency metrics showcase Conagra’s operational prowess. Though the Free Cash Flow Yield is healthy, the CAPEX to Operating Cash Flow indicates efficient reinvestments. The Stock-based Compensation to Revenue ratio signifies modest reward incentives.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Free Cash Flow Yield | 12.16% | 11.23% | 3.80% |
| Earnings Yield | 10.76% | 2.40% | 4.10% |
| CAPEX to Operating Cash Flow | 23.01% | 19.25% | 36.39% |
| Stock-Based Compensation to Revenue | 0.36% | 0.26% | 0.65% |
| Free Cash Flow / Operating Cash Flow Ratio | 76.99% | 80.75% | 63.61% |
These indicators reflect a stable cash flow generation albeit with high capital requirements.
✅ Balance Sheet & Leverage Analysis
A close examination reveals Conagra's financial structure, indicating moderate debt levels. High Debt-to-Capital ratios may expose it to economic fluctuations.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Debt-to-Equity | 0.93 | 1.02 | 1.08 |
| Debt-to-Assets | 0.40 | 0.41 | 0.43 |
| Debt-to-Capital | 0.48 | 0.51 | 0.52 |
| Net Debt to EBITDA | 4.19 | 5.90 | 5.53 |
| Current Ratio | 0.71 | 0.97 | 0.76 |
| Quick Ratio | 0.24 | 0.33 | 0.26 |
| Financial Leverage | 2.34 | 2.47 | 2.52 |
Overall balance sheet quality suggests room for improving liquidity and reducing debt.
✅ Fundamental Strength & Profitability
Strong fundamentals signal growth potential. Return metrics are low, pointing to competitive market impacts, while Margins reveal room for efficiency improvements.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Return on Equity | 12.90% | 4.11% | 7.82% |
| Return on Assets | 5.50% | 1.66% | 3.10% |
| Net Margin | 9.92% | 2.88% | 5.57% |
| EBIT Margin | 13.57% | 8.68% | 10.71% |
| EBITDA Margin | 16.93% | 12.00% | 13.73% |
| Gross Margin | 25.86% | 27.66% | 26.59% |
| R&D to Revenue | 0.52% | 0.51% | 0.47% |
The profitability metrics validate potential improvements, especially in margins and return metrics.
📈 Price Development
🎯 Dividend Scoring System
| Category | Description | Score |
|---|---|---|
| Dividend Yield | Reflects current dividend return | |
| Dividend Stability | Consistency of dividend payouts | |
| Dividend Growth | Rate of dividend increase | |
| Payout Ratio | Sustainability of dividend payments | |
| Financial Stability | Balance sheet strength | |
| Dividend Continuity | Historical reliability | |
| Cashflow Coverage | Cash flow supporting payouts | |
| Balance Sheet Quality | Debt levels and liquidity |
Total Score: 38/40
⚠️ Rating
Conagra Brands maintains a high yield with a robust dividend history, yet recent payout strains and a high EPS ratio necessitate caution. It remains appealing for income investors, provided they consider potential volatility. A moderate Risk: Investors are recommended to monitor the sustainability of distributable cash flow.