Is Conagra Brands a Good Investment?

PHOTO CREDIT: Conagra Brands

OVERVIEW

Conagra Brands Incorporation is a company based in the United States. The company designs, manufactures, and distributes food products around the world. The company manufactures an assortment of sauces, toppings, snacks, and many other products under the Birds Eye, Duncan Hines, Healthy Choice, and many other brands and products. The company was founded in 1919.

Why You Should?

  1. Conagra Brands is a great reopening play in an investor’s portfolio. The company saw some growth and demand for its commercial products fall as the pandemic shut down restaurants and other large venues. However, once this pandemic comes to an end, the company will see strong demand across all of its product categories return.
  2. The COVID-19 pandemic also benefited the company in the short to mid-term. As the pandemic spread across the nation and the world, consumers stocked up on pantry food products and other comfort foods. Conagra Brands saw strong double-digit growth in these initial months of the pandemic due to these new trends. This benefited the company and its investors.
  3. Conagra Brands offers a wide range of well-known products to consumers around the world. For example, the company manufactures the popular Reddi-Whip whipped cream and Marie Calendars. A strong product portfolio made up of well-known brands will help the company grow across several markets and will also help it retain customers.
  4. Conagra Brands is a fairly safe investment option in an investor’s portfolio. Despite the economic conditions, consumers around the world will continue to spend money on food products. This will help the company go through tough economic times and will also help investors stabilize their respective portfolios.
  5. Like many other food companies, Conagra Brands offers a great dividend for investors. At the moment, the company offers a dividend of $1.25, or 3.71%, per stock per year. In addition to this already high amount, the company continues to increase this amount year over year to reward new and long-term investors.

Why You Should Not?

  1. The company faces tough competition in the food industry. Some of these competitors include General Mills, Campbell Soup Company, Hershey’s, Hormel Foods, and many others. This competition might hurt the company and its investors in the future.
  2. Conagra Brands faces some tough supply chain and high-cost issues in the short to mid-term. For example, the company struggled to find raw materials and other logistics services in its most recent quarter due to severe shortages. High costs also increased a bearish sentiment amongst several analysts. These issues will continue to hurt the company and its investors.

MY OPINION

I think that Conagra Brands is a decent long-term investment due to its position as a good reopening play, positive impacts from the pandemic, a wide range of well-known products, a good dividend play, as well as its position as a safe investment option. However, tough competition and negative impacts from supply chain issues might hurt the company and its investors in the future.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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