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

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

Analyst Recommendations

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

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

Utz Brands currently has a consensus price target of $13.39, suggesting a potential downside of 6.09%. Conagra Brands has a consensus price target of $14.07, suggesting a potential downside of 4.18%. Given Conagra Brands’ higher possible upside, analysts plainly believe Conagra Brands is more favorable than Utz Brands.

Dividends

Utz Brands pays an annual dividend of $0.25 per share and has a dividend yield of 1.8%. Conagra Brands pays an annual dividend of $0.70 per share and has a dividend yield of 4.8%. Utz Brands pays out -58.1% of its earnings in the form of a dividend. Conagra Brands pays out -17.6% 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. Utz Brands has raised its dividend for 3 consecutive years and Conagra Brands has raised its dividend for 5 consecutive years. Conagra Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Utz Brands and Conagra Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Utz Brands	-2.67%	7.64%	3.62%
Conagra Brands	-16.95%	11.46%	4.51%

Volatility & Risk

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

Institutional & Insider Ownership

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

Valuation & Earnings

This table compares Utz Brands and Conagra Brands”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Utz Brands	$1.44 billion	1.42	$800,000.00	($0.43)	-33.15
Conagra Brands	$11.24 billion	0.62	-$1.92 billion	($3.98)	-3.69

Utz Brands has higher earnings, but lower revenue 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.

Summary

Utz Brands beats Conagra Brands on 9 of the 16 factors compared between the two stocks.

About Utz Brands

Utz Brands, Inc. makes and markets snack foods, including potato chips, pretzels, tortilla chips, popcorn, pork rinds and cheese snacks. Its portfolio includes Utz, Zapp’s, Boulder Canyon, On The Border and Golden Flake, among other brands. Founded in 1921 by William and Salie Utz in Hanover, Pennsylvania, the company began as a family-operated potato chip business and has grown through expansion and acquisitions. Utz is headquartered in Hanover. The company sells its products across the United States, with a longstanding presence in the eastern U.S. Its products reach consumers through grocery and convenience stores, mass retailers, club stores, and other retail and food-service channels.

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.