Conagra Brands Is Set to Invest $220 Million in a Manufacturing Plant But Its Stock is Down This Week. Is the Packaged Foods Company a Buy in 2026?

By Reuben Gregg Brewer – Mar 15, 2026 at 12:15PM ESTKey PointsConagra Brands is a packaged food company that has to adjust its business to consumer trends.The company's sales have been weak, and it owns largely second-tier brands.To compete effectively in the packaged food industry, companies need to align their brands and products with consumer buying habits. Companies are always making changes to keep pace with industry shifts. Conagra Brands (CAG +1.45%) is doing that, as it looks to expand production in a key facility. Here's why that isn't a good reason to buy the stock. Conagra is making a $220 million upgrade It is hardly bad news that Conagra is investing $220 million to add capacity to a chicken processing facility. It is making this investment due to the strong demand for a recently introduced fried chicken product. And there could be more positive news in the fried chicken space, as the company plans to introduce more innovation in the area based on the success of its initial product. Image source: Getty Images. The problem here is that every consumer staples company has to lean into innovation or they risk falling out of step with consumers. That's really all Conagra is doing here. And it is in support of just one product in a much larger portfolio. The big question investors should be asking is how the company as a whole is performing. The answer is not very good. Conagra is not an industry leader To be fair, the entire packaged food sector is facing headwinds right now. Consumers are tightening their budgets because of economic concerns, and there has been a shift toward healthier food options. That said, Conagra's portfolio is filled with second-tier brands, and that's long been the case. And it has been struggling financially. ExpandNYSE: CAGConagra BrandsToday's Change(1.45%) $0.23Current Price$16.41Key Data PointsMarket Cap$7.9BDay's Range$16.38 - $16.8652wk Range$15.96 - $27.68Volume487KAvg Vol13MGross Margin24.54%Dividend Yield8.53% Notably, in the fiscal second quarter of 2026, the company's sales fell 6.8%, with organic sales off by 3%. Earnings in the quarter were deeply in the red because the company wrote down the value of some of its brands, effectively admitting they weren't as valuable as it had thought. Investors looking to own companies that are industry leaders should probably avoid Conagra. Conagra's yield is huge for a reason For many, the big draw with Conagra will be its lofty 8.6% dividend yield. The company is projecting that its adjusted earnings will cover the dividend in fiscal 2026, but most long-term investors will probably be better off with a better-positioned consumer staples company even if that means accepting a lower yield. While the capital investments being made are good news, they must be couched within Conagra's much larger business framework. And that framework just isn't that impressive.Read NextMar 12, 2026 •By Catie HoganIs Conagra Stock a Long-Term Buy?Mar 4, 2026 •By Matt DiLallo3 Monster Dividend Stocks Yielding Up to 10.7%Mar 3, 2026 •By John BallardIs Conagra Brands Stock Going to $25?Feb 26, 2026 •By Matt DiLalloThis 7.4%-Yielding Dividend Stock Now Has the Highest Yield in the S&P 500.

Can It Satisfy Your Hunger for Income?Feb 25, 2026 •By Matt DiLalloHave $1,000? These 2 Stocks Could Be Bargain Buys for 2026 and BeyondFeb 23, 2026 •By Thomas Niel3 Consumer Stocks to Buy at a DiscountAbout the AuthorReuben Gregg Brewer is a contributing Motley Fool stock market analyst covering energy, utilities, REITs, and consumer staples. He is the former director of research at Value Line Publishing, where he rose from mutual fund analyst to equity analyst before leading all research operations. Reuben holds a bachelor’s degree in psychology from SUNY Purchase, a master’s in social work from Columbia University, and an MBA from Regis University. He has been featured as a financial expert on CNBC and in the Financial Times, Barron’s, and InvestmentNews.TMFReubenGBrewerStocks MentionedConagra BrandsNYSE: CAG$16.41(+1.45%)+$0.24*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.