ConAgra Foods (NYSE:CAG) has had a rough time this year. Shares of the packaged foods giant are down 6% this year, lagging behind the broader market's modest gains. The problems stem from poor performance in its frozen foods and canned goods product lines.

But while at first glance ConAgra's situation might look grim, there may be reason to think a turnaround is in order. A coming management shake-up could provide a catalyst. And even though ConAgra's large acquisition saddled the company with a lot of debt, the company generates enough cash flow to steadily pay down its debt over time. Once it does this, there should be more cash flow available to increase dividends down the road.

Put it all together, and if you fashion yourself the type of investor who buys low, there may be no better time to bet on ConAgra than right now.

Management shake-up
Last quarter, ConAgra released a dud of an earnings report. Sales and profits badly missed estimates, and the stock tanked after the company reported. The numbers were ugly across the board. Sales fell 7% in the company's biggest operating segment, consumer foods. This is where the company's three core brands -- Healthy Choice, Chef Boyardee, and Orville Redenbacher's -- are housed. Collectively, these three brands generate approximately $1 billion in annual sales.

Management acknowledged the poor performance. At the time, Chief Executive Officer Gary Rodkin said, "We are disappointed with fiscal 2014 overall, and we have a very focused sense of urgency directed toward improving our results."

The company's deep problems resulted in Monday's announcement of the CEO's plans to retire in May 2015. This wasn't a shock, considering the company's one major strategic initiative over the past few years, the $5 billion acquisition of Ralcorp Holdings, has gone extremely poorly.

ConAgra recognized $681 million in non-cash impairment charges last quarter, mostly because of higher-than-anticipated costs related to the acquisition. The company is spending a lot to integrate Ralcorp into its existing business. In addition, management is not generating the cost synergies it thought it would, as the expected duplicative costs that management was counting on eliminating are proving stickier than initially thought.

The market could view whichever incoming executive takes the helm as a mark of a promising strategic change that could give the company a better shot at a meaningful turnaround.

Improving balance sheet
To that end, there's a lot of work to be done. For example, at the end of its most recent fiscal year, the company held more than $8.6 billion in senior long-term debt.

Repaying this debt will be a top priority going forward. ConAgra repaid more than $600 million in the past fiscal year, and it will step that figure up even further in the upcoming fiscal year. The company expects to repay approximately $1 billion of debt this year.

As ConAgra improves its financial condition, its standing among investors could improve as well. Shares of ConAgra have performed poorly this year, and as a result, the company has fairly low expectations embedded in its stock price. ConAgra trades for just 14 times trailing adjusted earnings per share, and only about 13 times forward earnings estimates. Those valuations represent significant discounts to the broader market. If ConAgra is able to steadily improve its balance sheet by reducing debt, the market may become more confident in its turnaround.

Debt repayment could free up future cash flow for more dividends
Once ConAgra pays off debt, it will have more cash flow to finance cash returns to shareholders. ConAgra distributed less than half of its free cash flow as a dividend last year. One reason that it hasn't been more aggressive in increasing its dividend recently is likely because it needs all the spare cash it can get to pay off debt relating to its acquisition.

ConAgra yields 3.2%, and there's room for a future increase once its financial position improves. ConAgra has a history of steadily increasing its dividend. Over the past five years, it has increased its payout by 5% compounded annually. But dividend increases have slowed in recent years, as the company has allocated more cash to its strategic initiatives. ConAgra hasn't increased its dividend in nearly two years. 

That said, a 3.2% yield is still attractive to income investors.  After all, with stock markets sitting near all-time highs, and interest rates still stuck near historic lows, yield is hard to find right now. Even for all its troubles, ConAgra's dividend is well covered by profits. The company generated $2.17 per share in adjusted earnings in fiscal 2014, meaning the payout ratio sits at just 46%.

Since ConAgra distributes less than half of its adjusted profits, there may even be room for a dividend increase in the future once the company makes more progress in paying off its debt.

Put it all together and ConAgra's new management, improving balance sheet, and compelling dividend could be three solid reasons for ConAgra shares to rise.