Analyzing Darling Ingredients (DAR) and ConAgra Foods (CAG)

Darling Ingredients (NYSE: DAR) and ConAgra Foods (NYSE:CAG) are both mid-cap consumer staples companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Institutional and Insider Ownership

94.5% of Darling Ingredients shares are owned by institutional investors. Comparatively, 77.3% of ConAgra Foods shares are owned by institutional investors. 2.0% of Darling Ingredients shares are owned by insiders. Comparatively, 0.8% of ConAgra Foods shares are owned by 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.

Risk and Volatility

Darling Ingredients has a beta of 1.61, suggesting that its stock price is 61% more volatile than the S&P 500. Comparatively, ConAgra Foods has a beta of 0.32, suggesting that its stock price is 68% less volatile than the S&P 500.

Profitability

This table compares Darling Ingredients and ConAgra Foods’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Darling Ingredients 2.39% 3.99% 1.77%
ConAgra Foods 7.43% 20.29% 7.56%

Valuation & Earnings

This table compares Darling Ingredients and ConAgra Foods’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Darling Ingredients $3.52 billion 0.74 $428.51 million $0.51 31.02
ConAgra Foods $7.83 billion 1.84 $1.57 billion $1.47 23.47

ConAgra Foods has higher revenue and earnings than Darling Ingredients. ConAgra Foods is trading at a lower price-to-earnings ratio than Darling Ingredients, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Darling Ingredients and ConAgra Foods, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Darling Ingredients 0 0 5 0 3.00
ConAgra Foods 1 2 7 0 2.60

Darling Ingredients presently has a consensus target price of $18.60, suggesting a potential upside of 17.57%. ConAgra Foods has a consensus target price of $43.90, suggesting a potential upside of 27.25%. Given ConAgra Foods’ higher possible upside, analysts clearly believe ConAgra Foods is more favorable than Darling Ingredients.

Dividends

ConAgra Foods pays an annual dividend of $0.85 per share and has a dividend yield of 2.5%. Darling Ingredients does not pay a dividend. ConAgra Foods pays out 57.8% of its earnings in the form of a dividend.

Summary

ConAgra Foods beats Darling Ingredients on 10 of the 16 factors compared between the two stocks.

Darling Ingredients Company Profile

Darling Ingredients Inc. (Darling) is a developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy and fertilizer industries. The Company operates through three segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. The Company collects and transforms all aspects of animal by-product streams into useable and specialty ingredients, such as gelatin, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstocks, green energy, natural casings and hides. In addition, the Company provides grease trap services to food service establishments, environmental services to food processors and sells restaurant cooking oil delivery and collection equipment.

ConAgra Foods Company Profile

Conagra Brands, Inc., formerly ConAgra Foods, Inc., operates as a packaged food company. The Company operates through two segments: Consumer Foods and Commercial Foods. The Company sells branded and customized food products, as well as commercially branded foods. It also supplies vegetable, spice and grain products to a range of restaurants, foodservice operators and commercial customers. Conagra Foodservice offers products to restaurants, retailers, commercial customers and other foodservice suppliers. The Company also operates in the countries outside the United States, such as Canada and Mexico. The Company’s brands include Marie Callender’s, Healthy Choice, Slim Jim, Hebrew National, Orville Redenbacher’s, Peter Pan, Reddi-wip, PAM, Snack Pack, Banquet, Chef Boyardee, Egg Beaters, Rosarita, Fleischmann’s and Hunt’s. The Company sells its products in grocery, convenience, mass merchandise and club stores.

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