ConAgra Foods (CAG) is a Defensive Dividend Payer

Nearly every single household in America is home to some product from ConAgra Foods (CAG). With such total market penetration, and a 3.3% dividend payout, here's something to chew on.

It has been a rocky few months for investors as the world tries to absorb some of the economic data coming out of major economies, including the United States. This had led to some volatility in markets and forced conservative investors to seek out companies in defensive industries with strong dividend paying histories.
One such stock is ConAgra Foods (CAG) which reported fourth quarter earnings this week. While "the Street" may have been disappointed and the stock may have missed some analyst expectations in the near-term, the company still trades on a dividend yield of around 3.3% and a relatively competitive price to earnings multiple of around 12.9 times.
ConAgra, established in 1861 manufactures a number of household brand names including Egg Beaters, Healthy Choice, Hunt’s, Orville Redenbacher’s, and PAM. The company’s products are found in 96% of American households. These strong and recognizable brands make the company a very defensive choice for investors.
The company said it expected sales to rise by between 8-10% in the new financial year.
An important takeaway from the financial reports for the financial year was the strong cash flows. Full year operating cash flow from continuing operations was $1.4 billion, up approximately $450 million from the previous period. Companies in defensive industries usually generate large cash flows allowing them to fund growth and pay out generous dividends.
Gary Rodkin, ConAgra Foods (CAG) Chief Executive Officer told investors: "We grew year-over-year unit and dollar market share in our Consumer Foods segment, reflecting successful sales, innovation, and marketing initiatives. This top-line progress, coupled with cost savings initiatives, allowed us to generate strong earnings, invest for the future, and more than offset challenges affecting our Commercial Foods segment. We are confident that fiscal 2011 will continue to demonstrate our company's earnings power and ability to generate strong cash flows."
These strong cash flows have meant that ConAgra (CAG) has been able to consistently return money to shareholders and the company has paid a dividend since 1977.
If you as an investor are seeking to position your portfolio with defensive stocks which focus on returning dividends to shareholders, then ConAgra (CAG) may be a stock for consideration.
To see the BestCashCow Dividends page, click here.

Your code to embed this article on your website* :

*You are allowed to change only styles on the code of this iframe.


Add your Comment