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Despite efforts to restructure the company, ConAgra Foods (NYSE:CAG) just fails to have the type of brand appeal that competitors like Kraft (KFT) and General Mills (NYSE:GIS). This makes the company most vulnerable to margins compression and lower consumer expenditures. Currently, the food producer is rated a "hold" on the Street while Kraft is rated a "strong buy". Based on my multiples analysis and DCF model, I find myself in agreement with the preference on the Street.

From a multiples perspective, Kraft is the more expensive of the two. It trades at a respective 20.6x and 15x past and forward earnings while ConAgra trades at a respective 14.8x and 13.7x past and forward earnings. In addition, the latter also offers a dividend yield that is roughly 50 bps higher at 3.6%. Both firms also offer little volatility with betas well below 1. Despite the appearance of being overvalued, Kraft is much more likely to maintain or expand its multiples given the strength of its brand. Rated between these two is General Mills , which trades at 17.3x past earnings and offers a dividend yield of 3%.

At the third quarter earnings call, ConAgra's CEO, Gary Rodkin, noted better-than-expected performance and successful results from strategy:

"EPS from continuing operations was $0.41 as reported and $0.47 on a comparable basis. It was a little higher than planned, but as a point of reference, last year's comparable amount was $0.45.

We're pleased with the business performance of the quarter. We demonstrated good top line performance, with both our segments reflecting pricing needed to help offset inflation. Our Commercial Foods segment posted a strong double-digit rate of operating profit growth, driving the over-delivery for the quarter. We're on track for our full year commitments, which you'll hear more about later from John.

Right now, I'd like to share a few highlights from the quarter for each segment, starting with Commercial Foods. We saw favorable results in terms of pricing actions, volumes and mix".

The company recently purchased the National Pretzel Company and a greater interest in India's Argo Tech Foods. While I am attracted to the emerging market penetration, the company still remains very much a domestic marketer. And the problem is that the company will lose share if consumer expenditures were to decline to a relatively limited pricing power. On the other hand, if the company aims to increase scale through further acquisitions - and I expect it to seek out Ralcorp's competitors - EPS dilution would follow. Management is anticipating a 9-10% rise in costs for 2012.

Consensus estimates for ConAgra's EPS forecast that it will grow by 3.4% to $1.81 in 2012 and then by 8.3% and 8.2% more in the following two years. Assuming a multiple of 14x and a conservative 2013 EPS of $1.87, the stock is roughly at fair value. Modeling a CAGR of 6.6% for EPS over the next three years and then discounting backwards at a WACC of 9% yields a figure of $27.18.

More promising upside can be found at Kraft. During the third quarter, the company had stellar growth across all regions. Notably, the company was able to offset input volatility by boosting prices, which did not notably mitigate business. Kraft actually was able to grow its operating income by the double-digits through this process. With the company planning to split into two, investors will also have a better ability to properly value the businesses on a standalone basis. Kraft's $800M notes were recently rated BBB-.

Consensus estimates for Kraft's EPS forecast that it will grow by 12.4% and then by 11% and 11.1% more in the following two years. Assuming a multiple of 17.5x and a conservative 2012 EPS of $2.45, the rough intrinsic value of the stock is $42.88, implying 13.5% upside. This is an absolute minimum case, as I anticipate the multiple either holding steady or increasing.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.