Bull of the Day: Conagra Brands Inc. (CAG)
With the calendar flipped to a new year and some investors looking for new portfolio adds, it’s beneficial to remember the importance of targeting sectors witnessing positive earnings estimate revisions.
That’s precisely what the Zacks Consumer Staples sector has seen, currently ranked #3 out of all 16 Zacks sectors.
And as we’re all highly aware, 50% of a stock's price movement can be attributed to the group it’s in, further stating the importance of targeting areas that analysts have recently become bullish on.
One company residing in the sector, Conagra Brands CAG, has seen its earnings outlook drift higher across all timeframes over the last several months.
Image Source: Zacks Investment Research
Conagra Brands is one of North America's leading branded food companies, offering premium edible products with a refined focus on innovation.
Let’s take a closer look at the company.
Share Performance
CAG shares have been visibly strong over the last year, up a double-digit 12% and widely outperforming the S&P 500’s performance.
Image Source: Zacks Investment Research
And over the last three months, Conagra shares have continued on their market-beating trajectory, up 11% compared to the S&P500’s nearly 8% gain.
Image Source: Zacks Investment Research
The relatively strong share performance indicates that buyers have been in control, something we can’t say for many stocks over the last year.
Valuation
The company’s valuation multiples aren’t stretched; CAG shares trade at a 15X forward earnings multiple, just a tick above the 14.3X five-year median and below its Zacks sector average.
Image Source: Zacks Investment Research
Conagra’s forward price-to-sales currently works out to be 1.6X, again marginally above the five-year median but below its Zacks sector average.
Image Source: Zacks Investment Research
Dividends
Who doesn’t enjoy getting paid?
Fortunately for those seeking income, CAG has that covered; the company’s annual dividend yield stands tall at 3.3%, well above that of its Zacks sector average.
Impressively, the company has grown its payout by more than 12% over the last five years.
Image Source: Zacks Investment Research
Quarterly Performance
For the cherry on top, CAG has had little issues exceeding quarterly estimates, surpassing the Zacks Consensus EPS Estimate in four consecutive quarters.
In its latest release, the company reported EPS more than 20% above expectations and penciled in a 1.4% revenue surprise. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Bottom Line
Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.
Additionally, the top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
Conagra Brands CAG would be an excellent stock for investors to keep on their watchlists, as displayed by its Zack Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Conagra Brands (CAG) : Free Stock Analysis Report
