Plenty of Ways to Play Conagra Brands Stock

A premium selling strategy could be prudent for CAG

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Conagra Brands, Inc. (NYSE:CAG) is one of North America's biggest branded food companies, with a market cap over $17 billion. You may not know Conagra, but you know their portfolio: Healthy Choice, Slim Jim, Reddi-wip, Vlasic, Angie's Popcorn, Duke's, Earth Balance, Gardein, and Frontera.

Conagra Brands doesn't report earnings until July 13 before the open, but there's plenty to unpack before the event. CAG is down 2.4% year-to-date, ceding this breakeven level earlier in the week. And today, the shares also breached their 320-day moving average for the first time on a closing basis since Jan. 13. Nevertheless, the stock also has a forward dividend of $1.10 and a dividend yield of 3.08%.

Depending on Conagra's price action this year, analysts may adjust, with five of the eight brokerages in coverage maintain a "hold" rating.

From a fundamental point of view, Conagra Brands is one of the safest dividend plays available on the market today. CAG also trades at a price-earnings ratio of 14.70 and has a forward price-earnings ratio of 13.26, making Conagra Brands stock an excellent value play as well. In addition, Conagra Brands has increased revenues by 6% and net income by 42% compared to what was reported for fiscal 2020. Looking a bit longer-term, Conagra Brands has increased revenues by 48% since fiscal 2018 and net income has grown by 75% since fiscal 2019. Overall, Conagra Brands stock's valuation and dividend yield make CAG stock a very appealing potential long-term investment, despite its lackluster performance in 2021.

It's also worth pointing out that CAG ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 17 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.


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