Conagra Brands (NYSE:CAG) Takes On Some Risk With Its Use Of Debt
Conagra Brands (NYSE:CAG) Takes On Some Risk With Its Use Of Debt
Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. As with many other companies Conagra Brands, Inc. (NYSE:CAG) makes use of debt. But is this debt a concern to shareholders?
霍華德·馬克斯說得很好,他表示,與其擔心股價波動,'我擔心的是永久性損失的可能性...我認識的每一個實踐投資者都會擔心這一點。'因此,看起來聰明的投資者知道,債務(通常與破產有關)是評估公司風險程度時的一個非常重要因素。與許多其他公司一樣,康尼格拉(Conagra Brands, Inc.)(紐交所:CAG)利用債務。但這些債務會成爲股東的擔憂嗎?
Why Does Debt Bring Risk?
爲什麼債務會帶來風險?
Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. When we think about a company's use of debt, we first look at cash and debt together.
一般來說,債務只有在公司無法輕易償還時才成爲真正的問題,要麼通過籌集資本,要麼通過公司自身的現金流。 資本主義的重要組成部分是「創造性破壞」過程,失敗的企業被銀行家無情地清算。 但更常見(但仍然昂貴)的情況是公司必須以低價稀釋股東權益,只是爲了控制債務。 然而,通過代替稀釋,債務可以成爲需要資本以高回報率投資增長的企業的極好工具。 當我們考慮公司的債務使用時,我們首先關注現金和債務的總量。
What Is Conagra Brands's Net Debt?
康尼格拉品牌的淨債務是多少?
The image below, which you can click on for greater detail, shows that Conagra Brands had debt of US$8.77b at the end of August 2024, a reduction from US$9.27b over a year. And it doesn't have much cash, so its net debt is about the same.
下面的圖片更詳細顯示,康尼格拉品牌在2024年8月底的債務爲87.7億美元,比一年前的92.7億美元減少。而現金儲備並不多,因此其淨債務大致相同。
How Strong Is Conagra Brands' Balance Sheet?
康尼格拉品牌的資產負債表有多堅實?
Zooming in on the latest balance sheet data, we can see that Conagra Brands had liabilities of US$3.65b due within 12 months and liabilities of US$8.91b due beyond that. On the other hand, it had cash of US$128.7m and US$933.4m worth of receivables due within a year. So it has liabilities totalling US$11.5b more than its cash and near-term receivables, combined.
深入了解最新的資產負債表數據,我們可以看到康尼格拉品牌面臨着12個月內到期的36.5億美元的負債,以及超過12個月到期的89.1億美元的負債。另一方面,它持有總值爲12870萬美元和93340萬美元的短期應收款項。因此,它的負債總額比現金和短期應收款項多115億美元。
This deficit is considerable relative to its very significant market capitalization of US$13.8b, so it does suggest shareholders should keep an eye on Conagra Brands' use of debt. Should its lenders demand that it shore up the balance sheet, shareholders would likely face severe dilution.
與其138億美元的非常顯著的市值相比,這一赤字相當可觀,因此暗示股東應密切關注康尼格拉品牌的債務使用情況。如果其債權人要求它加強資產負債表,股東可能面臨嚴重稀釋。
We use two main ratios to inform us about debt levels relative to earnings. The first is net debt divided by earnings before interest, tax, depreciation, and amortization (EBITDA), while the second is how many times its earnings before interest and tax (EBIT) covers its interest expense (or its interest cover, for short). The advantage of this approach is that we take into account both the absolute quantum of debt (with net debt to EBITDA) and the actual interest expenses associated with that debt (with its interest cover ratio).
BJ批發俱樂部控股公司的淨債務只有EBITDA的0.62倍。而其EBIT輕鬆覆蓋其利息費用,比例爲12.6倍。因此,我們對其超級保守的債務使用感到相當放心。雖然BJ批發俱樂部控股公司在EBIT方面沒有取得太多進展,但至少其盈利保持穩定。當分析債務水平時,資產負債表是顯然的切入點。但歸根結底,企業未來的盈利能力將決定BJ批發俱樂部控股公司能否隨着時間的推移加強資產負債表。因此,如果你要關注未來,可以查看一下這份免費的分析報告,了解分析師的盈利預測。
Conagra Brands has a debt to EBITDA ratio of 3.9 and its EBIT covered its interest expense 4.3 times. Taken together this implies that, while we wouldn't want to see debt levels rise, we think it can handle its current leverage. Even more troubling is the fact that Conagra Brands actually let its EBIT decrease by 6.6% over the last year. If it keeps going like that paying off its debt will be like running on a treadmill -- a lot of effort for not much advancement. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if Conagra Brands can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
康尼格拉品牌的淨債務(債務與息稅折舊攤銷前利潤之比率)爲3.9,其息稅前利潤(EBIt)覆蓋了利息支出的4.3倍。綜合考慮,這意味着,雖然我們不希望看到債務水平上升,但我們認爲它可以應對目前的槓桿。 更令人擔憂的是康尼格拉品牌事實上讓其EBIt在過去一年裏減少了6.6%。 如果繼續這樣下去還債就像在跑步機上奔跑-付出了很多努力卻沒有太多進展。 當你分析債務時,資產負債表顯然是要重點關注的地方。 但最終業務未來的盈利能力將決定康尼格拉品牌是否能夠隨着時間強化其資產負債表。 因此,如果你關注未來,你可以查看這份免費報告,顯示分析師的盈利預測。
Finally, a company can only pay off debt with cold hard cash, not accounting profits. So we always check how much of that EBIT is translated into free cash flow. During the last three years, Conagra Brands produced sturdy free cash flow equating to 56% of its EBIT, about what we'd expect. This cold hard cash means it can reduce its debt when it wants to.
最後,公司只能用冷硬現金償還債務,而不是會計利潤。所以我們始終檢查有多少EBIt轉化爲自由現金流。在過去三年中,康尼格拉生產出穩固的自由現金流,相當於其EBIt的56%,大約符合我們的預期。這筆冷硬現金意味着它可以在需要時減少債務。
Our View
我們的觀點
At the end of the day, we're far from enamoured with Conagra Brands's ability handle its debt, based on its EBITDA, or to handle its total liabilities. But the good news is that its solid conversion of EBIT to free cash flow gives us reason for some optimism. Once we consider all the factors above, together, it seems to us that Conagra Brands's debt is making it a bit risky. That's not necessarily a bad thing, but we'd generally feel more comfortable with less leverage. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. Case in point: We've spotted 5 warning signs for Conagra Brands you should be aware of.
歸根結底,我們對康尼格拉處理債務的能力並不滿意,基於其EBITDA,或處理其總負債的能力。但好消息是,其將EBIt轉化爲自由現金流的良好表現給我們一些樂觀理由。一旦我們綜合考慮上述所有因素,我們認爲康尼格拉的債務使其略顯風險。這並不一定是件壞事,但通常情況下,我們會更願意減少槓桿。毫無疑問,我們從資產負債表中最多了解債務。然而,並非所有的投資風險都存在於資產負債表中 - 遠非如此。舉例來說:我們發現康尼格拉有5個警示信號,您應該注意。
If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.
如果您有興趣投資能夠在不負債的情況下增長利潤的企業,請查看這份免費列表,其中列出了在資產負債表上擁有淨現金的成長型企業。
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