Continued elevated inflation rates have made it harder to find bargains at the store. It seems like the price of everything is up a lot.
However, while inflation has made most consumer products more expensive, it has had the opposite impact on the value of many leading consumer staples stocks. Shares of Conagra Brands (CAG 3.30%) and Kimberly Clark (KMB 0.42%) look like bargain buys right now for those with $1,000 to invest.
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A bargain dividend stock
Conagra Brands is one of the leading branded food companies in North America. Its portfolio includes Healthy Choice, Marie Callender's, and other brands.
The food stock has lost about 50% of its value over the past three years. Inflation has eaten into demand for its products, prompting customers to switch to lower-priced generic alternatives. Conagra's net sales declined by 6.8% during its fiscal 2026 second quarter (due in part to the sale of several non-core brands), while its margins remained under pressure. For the fiscal year, Conagra expects its organic sales to be roughly flat year over year, while delivering adjusted earnings of $1.70 to $1.85 per share.
NYSE: CAG
Key Data Points
With its stock price down to around $19 apiece, Conagra trades at about 11 times forward earnings. That's a bargain in today's market as the S&P 500 trades at nearly 22 times forward earnings. That cheap price is why Conagra currently has a 7.3% dividend yield, the highest in the S&P 500, where the average is around 1.2%. While the company's dividend payout ratio is approaching 80%, well above its 50%-55% target, its strong cash flow positions it to maintain the payout while it waits for market conditions to improve.
About to get a big boost
Kimberly Clark has lost about a quarter of its value over the last three years. The maker of Huggies, Kleenex, Scott, and other trusted brands has also struggled to grow sales (they were down 2.1% last year, primarily due to divestitures). Meanwhile, its adjusted earnings per share rose 3.2% to $7.53.
NASDAQ: KMB
Key Data Points
With Kimberly Clark's stock currently over $110 per share, it trades at about 15 times earnings. While it's not quite the bargain that Conagra is, it's still a lot cheaper than the broader market. That's why the company also offers a high dividend yield (4.3%).
Kimberly Clark recently extended its streak of dividend increases to 54 years in a row. That qualifies it as a Dividend King, a company with 50 or more consecutive years of annual dividend increases.
While the company has been growing slowly, that should change later this year. It agreed to buy Kenvue in a $48.7 billion deal last year. The acquisition of the maker of Band-Aid, Tylenol, and other leading consumer health brands should drive robust revenue and earnings growth in the coming years. Kimberly Clark expects to capture $2.5 billion in cost savings within two years of closing the deal, which should occur in the second half of this year.
Bargain buys
Conagra and Kimberly Clark have been under lots of pressure in recent years. As a result, they now trade at much lower valuations and offer higher dividend yields. That makes them bargain buys for those with $1,000 to invest right now. Investors can earn substantial dividend income while they wait for the share prices to recover as these businesses improve.
