By Rob Otman
Conagra (NYSE: CAG) is a $16 billion company today. Investors that bought shares one year ago are sitting on a -4.82% total return. That’s below the S&P 500’s return of 19.62%.
Conagra stock is underperforming the market. It’s beaten down, but it reports earnings soon. So is it a good time to buy? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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✓ Earnings-per-Share (EPS) Growth: Conagra reported a recent EPS growth rate of 111.54%. That’s above the food products industry average of 55.43%. That’s a great sign. Conagra’s earnings growth is outpacing competitors.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the food products industry is 22.51. And Conagra’s ratio comes in at 18.95. It’s trading at a better value than many of its competitors.
✗ Debt-to-Equity: The debt-to-equity ratio for Conagra stock is 93.17%. That’s above the food products industry average of 66.37%. That’s not a good sign.
✓ Free Cash Flow per Share Growth: Conagra has increased its FCF per share over the last year. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth.
✗ Profit Margins: The profit margin of Conagra comes in at 10.28% today. And generally, the higher, the better. We also like to see this ratio above competitors. Conagra’s profit margin is below the food products average of 10.77%. So that’s a negative indicator for investors.
✗ Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Conagra is 17.36% and that’s below its industry average ROE of 23.4%.
Conagra stock passes three of our six key metrics today. That’s why our Investment U Stock Grader gives it a Hold.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
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Source:: Investment You
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