ConAgra Foods (NYSE: CAG) and Campbell Soup (NYSE:CPB) are both large-cap consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.

Insider & Institutional Ownership

78.4% of ConAgra Foods shares are owned by institutional investors. Comparatively, 44.3% of Campbell Soup shares are owned by institutional investors. 0.8% of ConAgra Foods shares are owned by company insiders. Comparatively, 37.3% of Campbell Soup shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

ConAgra Foods pays an annual dividend of $0.85 per share and has a dividend yield of 2.6%. Campbell Soup pays an annual dividend of $1.40 per share and has a dividend yield of 3.1%. ConAgra Foods pays out 57.8% of its earnings in the form of a dividend. Campbell Soup pays out 48.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Campbell Soup is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares ConAgra Foods and Campbell Soup’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ConAgra Foods 7.43% 20.29% 7.56%
Campbell Soup 11.24% 59.84% 12.07%

Analyst Recommendations

This is a breakdown of current ratings for ConAgra Foods and Campbell Soup, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ConAgra Foods 1 2 7 0 2.60
Campbell Soup 4 7 0 0 1.64

ConAgra Foods presently has a consensus target price of $43.90, indicating a potential upside of 32.43%. Campbell Soup has a consensus target price of $51.50, indicating a potential upside of 14.11%. Given ConAgra Foods’ stronger consensus rating and higher possible upside, equities research analysts clearly believe ConAgra Foods is more favorable than Campbell Soup.

Risk and Volatility

ConAgra Foods has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500. Comparatively, Campbell Soup has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500.

Earnings and Valuation

This table compares ConAgra Foods and Campbell Soup’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ConAgra Foods $7.83 billion 1.76 $1.57 billion $1.47 22.55
Campbell Soup $7.89 billion 1.73 $1.99 billion $2.89 15.62

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

Summary

Campbell Soup beats ConAgra Foods on 10 of the 16 factors compared between the two stocks.

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.

About Campbell Soup

Campbell Soup Company is a food company, which manufactures and markets food products. The Company’s segments include Americas Simple Meals and Beverages; Global Biscuits and Snacks, and Campbell Fresh. The Americas Simple Meals and Beverages segment includes the retail and food service channel businesses. The segment includes the products, such as Campbell’s condensed and ready-to-serve soups; Swanson broth and stocks; Prego pasta sauces; Pace Mexican sauces; Campbell’s gravies, pasta, beans and dinner sauces; Plum food and snacks; V8 juices and beverages, and Campbell’s tomato juice. The Global Biscuits and Snacks segment includes Pepperidge Farm cookies, crackers, bakery and frozen products; Arnott’s biscuits, and Kelsen cookies. The Campbell Fresh segment includes Bolthouse Farms fresh carrots, carrot ingredients, refrigerated beverages and refrigerated salad dressings; Garden Fresh Gourmet salsa, hummus, dips and tortilla chips, and the United States refrigerated soup business.

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