Analyzing Conagra Brands (NYSE:CAG) & BAB (OTCMKTS:BABB)

Conagra Brands (NYSE:CAG) and BAB (OTCMKTS:BABB) are both consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Risk & Volatility

Conagra Brands has a beta of 0.11, meaning that its share price is 89% less volatile than the S&P 500. Comparatively, BAB has a beta of 0.21, meaning that its share price is 79% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Conagra Brands and BAB, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Conagra Brands	2	9	1	1	2.08
BAB	0	0	0	0	0.00

Conagra Brands currently has a consensus target price of $22.58, suggesting a potential upside of 18.49%. Given Conagra Brands’ stronger consensus rating and higher probable upside, research analysts clearly believe Conagra Brands is more favorable than BAB.

Insider & Institutional Ownership

83.8% of Conagra Brands shares are held by institutional investors. 0.5% of Conagra Brands shares are held by company insiders. Comparatively, 33.7% of BAB shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Conagra Brands	9.92%	12.52%	5.25%
BAB	16.24%	16.70%	11.54%

Earnings and Valuation

This table compares Conagra Brands and BAB”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Conagra Brands	$11.61 billion	0.78	$1.15 billion	$2.39	7.97
BAB	$3.55 million	1.73	$520,000.00	$0.07	12.07

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

Dividends

Conagra Brands pays an annual dividend of $1.40 per share and has a dividend yield of 7.3%. BAB pays an annual dividend of $0.04 per share and has a dividend yield of 4.7%. Conagra Brands pays out 58.6% of its earnings in the form of a dividend. BAB pays out 57.1% 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. Conagra Brands has raised its dividend for 5 consecutive years. Conagra Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Conagra Brands beats BAB on 10 of the 18 factors compared between the two stocks.

About Conagra Brands

Conagra Brands, Inc., together with its subsidiaries, operates as a consumer packaged goods food company primarily in the United States. The company operates through Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice segments. The Grocery & Snacks segment primarily offers shelf stable food products through various retail channels. The Refrigerated & Frozen segment provides temperature-controlled food products through various retail channels. The International segment offers food products in various temperature states through retail and foodservice channels outside of the United States. The Foodservice segment offers branded and customized food products, including meals, entrees, sauces, and various custom-manufactured culinary products packaged for restaurants and other foodservice establishments. The company sells its products under the Birds Eye, Marie Callender's, Duncan Hines, Healthy Choice, Slim Jim, Reddi-wip, Angie's, BOOMCHICKAPOP, Duke's, Earth Balance, Gardein, and Frontera brands. The company was incorporated in 1919 and is headquartered in Chicago, Illinois.

About BAB

BAB, Inc. franchises and licenses bagel and muffin retail units under the Big Apple Bagels (BAB), My Favorite Muffin (MFM), and SweetDuet (SD) trade names in the United States. It's BAB franchised brand includes daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches, and other related products; and MFM brand comprises various freshly baked muffins and coffees, as well as units operating as My Favorite Muffin Your All Day Bakery Café features specialty bagel sandwiches and related products. The company's SD brand includes frozen yogurt products. BAB, Inc. was founded in 1993 and is based in Deerfield, Illinois.