ConAgra has good news for stockholders

Shareholders of ConAgra Foods Inc. received encouraging news Friday at the company's annual meeting: Dividend payments will increase for the first time since September 2007.

The company's board of directors approved a 1-cent or 5 percent increase in the quarterly dividend to 20 cents. Announcement of the action, which occurred earlier Friday, prompted positive reactions from the nearly 100 shareholders.

Confidence in the company's earnings outlook and in its annual cash flows prompted the increase, ConAgra said in a statement to investors.

The new dividend still is decidedly less than the approximately 27 cents per share paid before 2006, when ConAgra increased its spending on marketing.

Board chairman Steven Goldstone and ConAgra CEO Gary Rodkin were upbeat during the 45-minute meeting, held at Joslyn Art Museum's Witherspoon Concert Hall. At last year's gathering, shareholders questioned company executives about the stock price and the dividend amount.

Of three questions asked Friday, only one was critical of the company's operations during the past year.

A representative for Capital Research Global Investors, which owns 5.8 percent of ConAgra's total shares, said he was satisfied with its overall performance but displeased by the fatal June 9 explosion that killed three workers at a Slim Jim plant in Garner, N.C.

Authorities have traced the June explosion to a natural gas leak ignited during installation of a hot water system by a contractor.

The investment fund representative asked Rodkin what changes the company would enact to eliminate future issues with third-party contractors.

ConAgra has certification procedures in place for its contractors, Rodkin said. He did not say whether the company planned to change those policies.

Goldstone said the company is beginning to deliver on the sustained growth potential he has observed, despite the “incredibly destabilizing” business environment.

“The momentum this company has started continues to build,” Goldstone said.

All four agenda items facing shareholder approval were passed, including the approval of the 2009 stock plan and executive incentive plan.

Rodkin said the company's dedication to marketing has helped grow its high-performing consumer food lines such as Healthy Choice, Marie Callender's and Orville Redenbacher's popcorn.

Shareholders viewed snippets of TV commercials featuring “Seinfeld” star Julia Louis-Dreyfus in a Healthy Choice ad, one touting Chef Boyardee's use of vegetables and another for Orville Redenbacher that drew a bit of laughter.

The growth of popular consumer food lines, Rodkin said, was evidenced by the $1.86 billion sales mark that increased operating profits 34 percent during the first quarter of the 2010 fiscal year.

ConAgra aims to lead the packaged food industry in convenience meal sales, Rodkin said. It also plans to expand its potato sales worldwide, leverage ingredient-based brands like Hunt's tomatoes, build a strong snacks platform, and optimize specialty brands like Reddi-wip dessert topping, he said.

ConAgra's shares declined 27 cents to close at $21.47 per share Friday.

Contact the writer:

444-1414, ross.boettcher@owh.com

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