CAG ConAgra Brands Inc

After reporting below-than-expected first quarter 2012 results, Omaha-based food giant, ConAgra Foods Inc. (CAG) tried to please its shareholders by announcing an increase in its quarterly dividend rate.

The company announced a cent increase in its quarterly dividend rate, which now stands at 24 cents compared with 23 cents earlier. Subsequent to the hike, the annualized dividend rate comes to 96 cents per common share of the company and will be first paid on December 1, 2011 to shareholders of record on October 31, 2011.

ConAgra Foods Inc. follows a consistent policy of returning cash to shareholders via dividend payments and share buybacks with approximately $1.2 billion returned via these sources in the fiscal year 2011. The compound annual growth rate (CAGR) of dividend for the period 2007-2011 for ConAgra is approximately 4.3%. The recent enhancement underscores the company's sound financial condition, solid cash position cash flow and the Board's confidence in CAG's bright future prospects.

In the recently reported quarter results, ConAgra Foods paid roughly $94.3 million in dividends. Cash and cash equivalents at the end of the quarter were $1,095.2 million and net cash from operating activities was around $315.1 million compared with $840.9 million and $108.8 million in the year-ago quarter, respectively.

The current Zacks Consensus Estimate for the second quarter of fiscal year 2012 is 43 cents per share, representing a year-over-year decline of 4.44%. Estimates for the fiscal years 2012 and 2013 are $1.79 and $1.95, reflecting annual growth of 2.29% and 9.12%, respectively.

ConAgra Foods Inc. is one of North America's leading food makers operating in the Consumer Foods and Commercial Foods segments. The company, over time, has given tough competition to its peers such as HJ Heinz Co. (HNZ) and Kraft Foods Inc. (KFT), based on its cost-control measures on the backdrop of rising raw material prices as well as its product-line expansion program in a highly-competitive food industry.

We currently maintain a Neutral recommendation on the stock.

 
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