Reviewing Limoneira (LMNR) and Adecoagro (AGRO)

Limoneira (NASDAQ: LMNR) and Adecoagro (NYSE:AGRO) are both small-cap consumer staples companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Profitability

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This table compares Limoneira and Adecoagro’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Limoneira 13.85% 5.27% 2.16%
Adecoagro 1.07% 1.48% 0.59%

Dividends

Limoneira pays an annual dividend of $0.25 per share and has a dividend yield of 1.0%. Adecoagro does not pay a dividend. Limoneira pays out 59.5% of its earnings in the form of a dividend.

Volatility and Risk

Limoneira has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, Adecoagro has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Institutional & Insider Ownership

27.9% of Limoneira shares are owned by institutional investors. Comparatively, 41.1% of Adecoagro shares are owned by institutional investors. 4.5% of Limoneira shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Limoneira and Adecoagro, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Limoneira 0 0 1 0 3.00
Adecoagro 0 2 0 0 2.00

Limoneira currently has a consensus target price of $28.00, indicating a potential upside of 15.75%. Adecoagro has a consensus target price of $9.00, indicating a potential upside of 12.22%. Given Limoneira’s stronger consensus rating and higher possible upside, equities analysts plainly believe Limoneira is more favorable than Adecoagro.

Valuation & Earnings

This table compares Limoneira and Adecoagro’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Limoneira $121.31 million 2.90 $6.59 million $0.42 57.60
Adecoagro $933.18 million 1.04 $9.97 million $0.08 100.25

Adecoagro has higher revenue and earnings than Limoneira. Limoneira is trading at a lower price-to-earnings ratio than Adecoagro, indicating that it is currently the more affordable of the two stocks.

Summary

Limoneira beats Adecoagro on 10 of the 16 factors compared between the two stocks.

Limoneira Company Profile

Limoneira Company operates as an agribusiness and real estate development company in the United States and internationally. The company operates through six segments: Fresh Lemons, Lemon Packing, Avocados, Other Agribusiness, Rental Operations, and Real Estate Development. The Fresh Lemons segment markets and sells lemons directly to food service, wholesale, and retail customers. It has approximately 4,800 acres of lemons. The Lemon Packing segment engages in lemon packing, and shipping and handling activities. This segment also processes, packs, and sells lemons grown by others. The Avocados segment grows avocados. This segment has approximately 900 acres of avocados. The Other Agribusiness segment grows oranges and specialty citrus; and other crops, including Moro blood oranges, Cara Cara oranges, Minneola tangelos, Star Ruby grapefruit, pummelos, pistachios, and wine grapes. This segment has approximately 1,500 acres of oranges; and approximately 1,000 acres of specialty citrus and other crops. The Rental Operations segment owns and maintains approximately 245 residential housing units; and commercial properties, such as office buildings and a multi-use facility, as well as leases approximately 500 acres of its land to third-party agricultural tenants. It is also involved in organic recycling operations. The Real Estate Development segment develops parcels, multi-family housing, and single-family homes. The company has its agricultural plantings in Ventura, Tulare, San Bernardino, and San Luis Obispo counties in California; Yuma county in Arizona; and La Serena, Chile. Limoneira Company markets and sells its lemons directly to food service, wholesale, and retail customers; avocados to a packing and marketing company; oranges, specialty citrus, and other crops through Sunkist and other packinghouses; and wine grapes to wine producers. The company was founded in 1893 and is headquartered in Santa Paula, California.

Adecoagro Company Profile

Adecoagro S.A., an agricultural company, engages in farming crops and other agricultural products, dairy operations, sugar, ethanol and energy production, and land transformation activities in South America. The company is involved in planting, harvesting, and selling grains, oilseeds, and fibers, including wheat, corn, soybeans, cotton, sunflowers, and others; and providing grain warehousing/conditioning, and handling and drying services to third parties. It also engages in planting, harvesting, processing, and marketing rice; and producing and selling fluid milk and other dairy products. In addition, the company is involved in the cultivation and processing of sugar and ethanol, as well as cogeneration of electricity from sugarcane bagasse; and identification and acquisition of underdeveloped and undermanaged farmland, and realization of value through the strategic disposition of assets. Further, it is involved in leasing approximately 27,216 hectares of pasture land to cattle farmers in Argentina; and coffee plantation in the Rio de Janeiro farm located in Western Bahia to a third party. As of December 31, 2016, the company owned a total of 246,139 hectares, which comprised 19 farms in Argentina, 11 farms in Brazil, and 1 farm in Uruguay; 3 rice processing facilities in Argentina; 2 dairy facilities with approximately 6,880 milking cows in Argentina; 11 grain and rice conditioning and storage plants in Argentina; and 3 sugar and ethanol mills in Brazil with a sugarcane crushing capacity of 11.2 million tons, as well as had a total of 232 MW of installed cogeneration capacity. Adecoagro S.A. was founded in 2002 and is based in Luxembourg.

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