Head-To-Head Survey: Conagra Brands (NYSE:CAG) & Smithfield Foods (NASDAQ:SFD)

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

Volatility and Risk

Conagra Brands has a beta of 0.02, suggesting that its stock price is 98% less volatile than the S&P 500. Comparatively, Smithfield Foods has a beta of -0.39, suggesting that its stock price is 139% less volatile than the S&P 500.

Earnings and Valuation

This table compares Conagra Brands and Smithfield Foods”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Conagra Brands	$11.28 billion	0.62	-$1.92 billion	($3.98)	-3.66
Smithfield Foods	$15.53 billion	0.47	$987.00 million	$2.28	8.04

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

Profitability

This table compares Conagra Brands and Smithfield 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%
Smithfield Foods	5.94%	13.41%	7.68%

Insider & Institutional Ownership

83.8% of Conagra Brands shares are held by institutional investors. 0.3% of Conagra Brands shares are held by insiders. Comparatively, 1.8% of Smithfield Foods shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Conagra Brands pays an annual dividend of $0.70 per share and has a dividend yield of 4.8%. Smithfield Foods pays an annual dividend of $1.25 per share and has a dividend yield of 6.8%. Conagra Brands pays out -17.6% of its earnings in the form of a dividend. Smithfield Foods pays out 54.8% 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. Conagra Brands has increased its dividend for 5 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Conagra Brands and Smithfield Foods, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Conagra Brands	5	12	1	0	1.78
Smithfield Foods	3	1	3	0	2.00

Conagra Brands currently has a consensus price target of $14.07, indicating a potential downside of 3.45%. Smithfield Foods has a consensus price target of $24.67, indicating a potential upside of 34.50%. Given Smithfield Foods’ stronger consensus rating and higher probable upside, analysts clearly believe Smithfield Foods is more favorable than Conagra Brands.

Summary

Smithfield Foods beats Conagra Brands on 12 of the 17 factors compared between the two stocks.

About Conagra Brands

Conagra Brands, Inc., together with its subsidiaries, operates as a consumer packaged goods food company primarily in the United States. The company operates through Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice segments. The Grocery & Snacks segment primarily offers shelf stable food products through various retail channels. The Refrigerated & Frozen segment provides temperature-controlled food products through various retail channels. The International segment offers food products in various temperature states through retail and foodservice channels outside of the United States. The Foodservice segment offers branded and customized food products, including meals, entrees, sauces, and various custom-manufactured culinary products packaged for restaurants and other foodservice establishments. The company sells its products under the Birds Eye, Marie Callender's, Duncan Hines, Healthy Choice, Slim Jim, Reddi-wip, Angie's, BOOMCHICKAPOP, Duke's, Earth Balance, Gardein, and Frontera brands. The company was incorporated in 1919 and is headquartered in Chicago, Illinois.

About Smithfield Foods

Smithfield Foods, Inc. produces and markets a variety of fresh meat and packaged meats products both domestically and internationally. The Company operates in four segments: Pork, Hog Production, International and Corporate, each of which consists of a number of subsidiaries, joint ventures and other investments. The Pork segment consists mainly of its three wholly owned United States fresh pork and packaged meats subsidiaries: The Smithfield Packing Company, Inc. (Smithfield Packing), Farmland Foods, Inc. (Farmland Foods) and John Morrell Food Group (John Morrell). The Hog Production segment consists of the Company’s hog production operations located in the United States. On September 2012 (fiscal 2013), the Company acquired a 70% controlling interest in American Skin Food Group, LLC. Effective September 26, 2013, Shuanghui International Holdings Ltd merged with Smithfield Foods Inc, a producer and wholesaler of pork meat products.