Comparing Cal-Maine Foods (NASDAQ:CALM) and Conagra Brands (NYSE:CAG)

Conagra Brands (NYSE:CAG) and Cal-Maine Foods (NASDAQ:CALM) are both mid-cap consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Conagra Brands and Cal-Maine Foods, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Conagra Brands	5	12	1	0	1.78
Cal-Maine Foods	1	4	1	0	2.00

Conagra Brands presently has a consensus price target of $14.07, indicating a potential downside of 4.08%. Cal-Maine Foods has a consensus price target of $84.17, indicating a potential upside of 28.69%. Given Cal-Maine Foods’ stronger consensus rating and higher probable upside, analysts clearly believe Cal-Maine Foods is more favorable than Conagra Brands.

Insider and Institutional Ownership

83.8% of Conagra Brands shares are held by institutional investors. Comparatively, 84.7% of Cal-Maine Foods shares are held by institutional investors. 0.3% of Conagra Brands shares are held by insiders. Comparatively, 3.6% of Cal-Maine Foods shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Conagra Brands and Cal-Maine Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Conagra Brands	-16.95%	11.46%	4.51%
Cal-Maine Foods	2.32%	2.21%	1.89%

Valuation and Earnings

This table compares Conagra Brands and Cal-Maine Foods”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Conagra Brands	$11.24 billion	0.62	-$1.92 billion	($3.98)	-3.68
Cal-Maine Foods	$2.53 billion	1.21	$316.68 million	$1.17	55.90

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

Dividends

Conagra Brands pays an annual dividend of $0.70 per share and has a dividend yield of 4.8%. Cal-Maine Foods pays an annual dividend of $1.42 per share and has a dividend yield of 2.2%. Conagra Brands pays out -17.6% of its earnings in the form of a dividend. Cal-Maine Foods pays out 121.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Conagra Brands has increased its dividend for 5 consecutive years and Cal-Maine Foods has increased its dividend for 1 consecutive years. Conagra Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Conagra Brands has a beta of 0.02, suggesting that its share price is 98% less volatile than the S&P 500. Comparatively, Cal-Maine Foods has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500.

Summary

Cal-Maine Foods beats Conagra Brands on 10 of the 16 factors compared between the two stocks.

About Conagra Brands

Conagra Brands is a packaged-food company that develops, manufactures and markets products for retail, foodservice and other customers. Its offerings include frozen meals and vegetables, snacks, baking products, condiments, cooking ingredients and meat snacks. The company’s portfolio includes brands such as Birds Eye, Healthy Choice, Marie Callender’s, Duncan Hines, Slim Jim, Orville Redenbacher’s, Hunt’s, Banquet and Reddi-wip. Its products are sold primarily in the United States, as well as in international markets.

About Cal-Maine Foods

Cal-Maine Foods, Inc. is an American producer and marketer of shell eggs. Founded in 1957 and headquartered in Ridgeland, Mississippi, the company raises laying hens and handles the grading, packaging, and distribution of eggs for retail and food-service customers. Its products include conventional, cage-free, free-range, organic, brown, and other specialty eggs. Cal-Maine sells eggs under its own labels and customer brands, and also markets products under licensed brands. The company serves customers across much of the United States, with operations and distribution focused primarily on the South, Southwest, and Midwest.