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Conagra Brands, Inc. (CAG)

Company Dividend Discount ModelIndustry: Packaged FoodsSector: Consumer Defensive

Valuation Snapshot

Stable Growth$16.72 - $25.75$20.92
Multi-Stage$24.45 - $26.72$25.56
Blended Fair Value$23.24
Current Price$19.16
Upside21.30%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS10.10%4.64%1.401.381.301.210.990.860.740.710.870.90
YoY Growth--1.50%5.69%7.22%22.59%14.75%16.11%4.06%-17.52%-4.05%1.72%
Dividend Yield--7.29%4.43%4.30%3.47%3.04%2.25%2.60%1.96%2.66%2.50%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)850.10
(-) Cash Dividends Paid (M)669.00
(=) Cash Retained (M)181.10
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)170.02106.2663.76
Cash Retained (M)181.10181.10181.10
(-) Cash Required (M)-170.02-106.26-63.76
(=) Excess Retained (M)11.0874.84117.34
(/) Shares Outstanding (M)479.10479.10479.10
(=) Excess Retained per Share0.020.160.24
LTM Dividend per Share1.401.401.40
(+) Excess Retained per Share0.020.160.24
(=) Adjusted Dividend1.421.551.64
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate0.54%1.54%2.54%
Fair Value$16.72$20.92$25.75
Upside / Downside-12.75%9.17%34.37%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)850.10863.22876.54890.06903.79917.74945.27
Payout Ratio78.70%80.96%83.22%85.48%87.74%90.00%92.50%
Projected Dividends (M)669.00698.84729.43760.81792.98825.96874.37

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate0.54%1.54%2.54%
Year 1 PV (M)634.36640.66646.97
Year 2 PV (M)601.04613.05625.18
Year 3 PV (M)569.05586.19603.68
Year 4 PV (M)538.38560.12582.51
Year 5 PV (M)509.03534.85561.71
PV of Terminal Value (M)8,862.939,312.549,780.21
Equity Value (M)11,714.7812,247.4212,800.28
Shares Outstanding (M)479.10479.10479.10
Fair Value$24.45$25.56$26.72
Upside / Downside27.62%33.42%39.44%

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