Conagra Brands (NYSE:CAG) & Utz Brands (NYSE:UTZ) Critical Analysis

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

Analyst Ratings

This is a summary of current recommendations and price targets for Conagra Brands and Utz Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Conagra Brands	5	12	1	0	1.78
Utz Brands	1	9	1	0	2.00

Conagra Brands presently has a consensus target price of $14.07, suggesting a potential downside of 7.78%. Utz Brands has a consensus target price of $13.39, suggesting a potential downside of 6.09%. Given Utz Brands’ stronger consensus rating and higher probable upside, analysts clearly believe Utz Brands is more favorable than Conagra Brands.

Valuation and Earnings

This table compares Conagra Brands and Utz Brands”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Conagra Brands	$11.28 billion	0.65	-$1.92 billion	($3.98)	-3.83
Utz Brands	$1.44 billion	1.43	$800,000.00	($0.33)	-43.20

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

Profitability

This table compares Conagra Brands and Utz Brands’ 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%
Utz Brands	-2.00%	8.97%	4.32%

Dividends

Conagra Brands pays an annual dividend of $0.70 per share and has a dividend yield of 4.6%. Utz Brands pays an annual dividend of $0.25 per share and has a dividend yield of 1.8%. Conagra Brands pays out -17.6% of its earnings in the form of a dividend. Utz Brands pays out -75.8% 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 and Utz Brands has increased its dividend for 3 consecutive years. Conagra Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

83.8% of Conagra Brands shares are held by institutional investors. Comparatively, 96.0% of Utz Brands shares are held by institutional investors. 0.3% of Conagra Brands shares are held by insiders. Comparatively, 12.7% of Utz Brands shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

Conagra Brands has a beta of 0.02, suggesting that its share price is 98% less volatile than the S&P 500. Comparatively, Utz Brands has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500.

Summary

Utz Brands beats Conagra Brands on 10 of the 16 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 Utz Brands

Utz Brands, Inc. engages in manufacture, marketing, and distribution of snack foods. It offers a range of salty snacks, including salty snacks, including potato chips, tortilla chips, pretzels, cheese snacks, pork skins, veggie snacks, pub/party mixes, tortilla chips, salsa and dips, ready-to-eat popcorn, and other snacks under the Utz, Zapp’s, ON THE BORDER, Golden Flake, Boulder Canyon, Hawaiian, TORTIYAHS!, etc. The company sells its products to wholesale and other distributors, grocery stores, convenience and drug stores, discount stores, mass merchandisers, membership club stores, hard discounters, and specialty and e-commerce retailers. Utz Brands, Inc. was founded in 1921 and is headquartered in Hanover, Pennsylvania.