Jim Cramer Notes Conagra’s “Flat Revenues for Multiple Years”

Conagra Brands, Inc. (NYSE:CAG) is one of the stocks Jim Cramer discussed recently. A caller asked if the stock is a dividend trap or if they should start “nibbling” on it. Here’s what Mad Money’s host had to say:

“The revenues are flat for Conagra for multiple years. I do not invest in companies that have flat revenues for multiple years.”

Photo by Joshua Mayo on Unsplash

Conagra Brands, Inc. (NYSE:CAG) produces packaged foods across shelf-stable, refrigerated, and frozen categories. Some of its brands include Slim Jim, Birds Eye, Marie Callender’s, Duncan Hines, Healthy Choice, and Reddi-wip. Cramer discussed the company’s dividend during the September 30 episode and commented:

“Tomorrow, Conagra Brands report. Solid brands, right? Birds Eye, Hunt’s, BOOMCHICKAPOP… household names, along with many others, plus the stock yields 7.6%. What’s not to like? Precisely what’s not to like is that 7.6% dividend yield. How can a packaged food company offer you such a great return? It’s because most investors don’t believe they can keep paying that dividend at current levels.

Now, you might be tempted to buy Conagra, it’s a solid company, but I’d rather go for it when it yields 7.6 going to 6 because then I’d be less concerned. If you buy the stock right now, you’re reaching for yield, which is something you should never do because if a dividend gets cut, stock’s going to get hammered no matter what. And let’s not forget when the yield was 5 or even 6, it didn’t stop the stock from going down, did it?”

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Disclosure: None. This article is originally published at Insider Monkey.