Conagra Foods’ (CAG) earnings report was posted recently by the food industry giant Conagra Foods. This includes brands such as Healthy Choice, Hunt’s and Hebrew National hot dogs. All fronts were covered by the company’s success. Some of the results were less than others. However, the company highlighted the impact inflation has on their business. Conagra Foods remains my top pick despite these problems.

Conagra’s past year consisted mainly of plateaus. While the share price fluctuated, Conagra has maintained a consistent pricing level. Conagra Foods’ shares ranged from $34 to $38 per ounce for the majority of 2021. While it does occasionally break out of the $34 to $38 range, most shares return to this price range. From March to mid-June, the company’s share prices were in the $36 to $308 range. A week in June saw a mere $38. The company’s closing price dropped to $36 on June 30, and has remained that way until this very day. TipRanks has Conagra stock chart.

Company’s latest earnings report has given it more credibility. Even though it was a little short of expectations, earnings beat them. Adjusted earnings were $0.50 per share, compared to estimates of $0.49 per per share. Conagra’s revenue was also a success, with $2.65 Billion in sales. Although it was a little lower than last year’s $2.68billion, this was still enough to surpass Refinitiv’s estimate of $2.54billion.

Conagra saw a decline in sales of certain frozen food and snack categories. Snacks and groceries were down by 4.9%, while frozen food sales were down by 2.5%. This could have been due to COVID’s petering out as pandemic-related stocking had marked the summer 2020. Even though some businesses were able to reopen this quarter, many faced restrictions due to social distance requirements. It could have affected the number of foods consumers bought.

Wall Street Take

Wall Street consensus calls Conagra Moderate Buy. Based on reports from 11 Wall Street analysts that have provided 12-month targets for Conagra’s price over the last three month, this conclusion is supported by Wall Street consensus analysis. The three analysts who call Conagra a Buy and the eight remaining Hold it are all from Wall Street.

Conagra’s moderate buy status is relatively new. Since July, Conagra has only been ranked Moderate Buy. Conagra has been a Hold since January 2021 when it was made a Moderate Buy.

Conagra’s average price target range is very narrow. The price range of Conagra is remarkably narrow and reflects its trading range with some room for improvement. With a maximum price target of $37.09 and minimum of $30, the average price is $35. That’s 9.99% upside potential, based upon the price at which it was last seen: $33.72.

Staple: Food

Conagra trades in tight ranges for the majority of the year. It makes sense from the beginning. Conagra isn’t the type of company that can invent so spectacularly it threatens to destabilize the market. Is Conagra going to come up with an entirely new type of corn flavor? Conagra cannot change the market by selling more food products. Food is just food.

Conagra’s trendline has remained relatively stable for the majority of the year. This is a great statement for income investors. Conagra pays a very regular dividend that dates back many years. The majority of dividend payments are regular. However, one payment was missing in 2013, and one date changed in 2020, from July to August. This year, however, the summer payment seems absent. Over the years, dividend payments have increased slowly, but steadily. The company was offering a $0.23 dividend in July 2011. The current payment will have an ex-dividend of October 29, and it will be approximately $0.31.

Investors are likely to be looking for a stock that is stable, with low volatility and little appreciation. It’s worth looking into for income investors. The entry price isn’t too high. It is protected from any economic downturn because the entire company’s stock of trade stocks are food. They can delay vacations and cruises. You can postpone buying fancy electronics. But, the majority of people won’t wait to buy food.

Ending views

Conagra holds a unique advantage on the market in that it is selling a product people require for food security. While it certainly has competitors—and some lower-priced—its susceptibility to market conditions is low, overall. Conagra is attractive for investors because it offers a steady dividend and regular increases.

Conagra has a relatively secure market. Due to its vital product, it is only slightly price sensitive. The share price trendline is as steady as they come, and the dividend is as solid as you can get. Conagra makes a good investment for income investors. It is also a solid place to begin looking.

Disclosure: Steve Anderson had no position in any securities at the time this article was published.

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