Bunge (BG) & Conagra Brands (CAG) Head to Head Comparison

Bunge (NYSE: BG) and Conagra Brands (NYSE:CAG) are both large-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
Bunge 1.06% 6.68% 2.26%
Conagra Brands 9.04% 19.58% 7.62%

Valuation and Earnings

This table compares Bunge and Conagra Brands’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bunge $42.94 billion 0.25 $745.00 million $3.19 23.53
Conagra Brands $7.83 billion 1.82 $639.30 million $1.67 21.28

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

Insider & Institutional Ownership

77.3% of Bunge shares are held by institutional investors. Comparatively, 79.6% of Conagra Brands shares are held by institutional investors. 1.3% of Bunge shares are held by insiders. Comparatively, 0.8% of Conagra 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.

Analyst Recommendations

This is a breakdown of current ratings for Bunge and Conagra Brands, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bunge 0 4 4 0 2.50
Conagra Brands 0 2 7 0 2.78

Bunge presently has a consensus target price of $81.00, indicating a potential upside of 7.91%. Conagra Brands has a consensus target price of $41.56, indicating a potential upside of 16.93%. Given Conagra Brands’ stronger consensus rating and higher probable upside, analysts clearly believe Conagra Brands is more favorable than Bunge.

Risk and Volatility

Bunge has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500. Comparatively, Conagra Brands has a beta of 0.27, meaning that its stock price is 73% less volatile than the S&P 500.

Dividends

Bunge pays an annual dividend of $1.84 per share and has a dividend yield of 2.5%. Conagra Brands pays an annual dividend of $0.85 per share and has a dividend yield of 2.4%. Bunge pays out 57.7% of its earnings in the form of a dividend. Conagra Brands pays out 50.9% 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. Bunge has increased its dividend for 16 consecutive years. Bunge is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Conagra Brands beats Bunge on 9 of the 17 factors compared between the two stocks.

Bunge Company Profile

Bunge Limited is an agribusiness and food company with integrated operations that stretch from the farm field to consumer foods. The Company operates through five segments: Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer. Its Agribusiness segment is an integrated, global business involved in the purchase, storage, transport, processing and sale of agricultural commodities and commodity products. Its edible oil products include packaged and bulk oils, shortenings, margarines, mayonnaise and other products derived from the vegetable oil refining process. Its milling products segment includes the production and sale of a range of wheat flours and bakery mixes. The Company is a producer and exporter of sugar. Through the Company’s operations in Argentina, it produces, blends and distributes a range of nitrogen, phosphate and potassium (NPK) fertilizers, including phosphate-based liquid and solid nitrogen fertilizers.

Conagra Brands Company Profile

Conagra Brands, Inc., formerly ConAgra Foods, Inc., operates as a packaged food company. The Company operates through two segments: Consumer Foods and Commercial Foods. The Company sells branded and customized food products, as well as commercially branded foods. It also supplies vegetable, spice and grain products to a range of restaurants, foodservice operators and commercial customers. Conagra Foodservice offers products to restaurants, retailers, commercial customers and other foodservice suppliers. The Company also operates in the countries outside the United States, such as Canada and Mexico. The Company’s brands include Marie Callender’s, Healthy Choice, Slim Jim, Hebrew National, Orville Redenbacher’s, Peter Pan, Reddi-wip, PAM, Snack Pack, Banquet, Chef Boyardee, Egg Beaters, Rosarita, Fleischmann’s and Hunt’s. The Company sells its products in grocery, convenience, mass merchandise and club stores.

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