Critical Review: Alico (ALCO) & Fresh Del Monte Produce (FDP)

Fresh Del Monte Produce (NYSE: FDP) and Alico (NASDAQ:ALCO) are both consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Valuation and Earnings

This table compares Fresh Del Monte Produce and Alico’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fresh Del Monte Produce $4.09 billion 0.53 $120.80 million N/A N/A
Alico $129.83 million 1.97 -$9.45 million N/A N/A

Fresh Del Monte Produce has higher revenue and earnings than Alico.

Dividends

Fresh Del Monte Produce pays an annual dividend of $0.60 per share and has a dividend yield of 1.4%. Alico pays an annual dividend of $0.24 per share and has a dividend yield of 0.8%. Fresh Del Monte Produce has increased its dividend for 2 consecutive years. Fresh Del Monte Produce is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

62.6% of Fresh Del Monte Produce shares are held by institutional investors. Comparatively, 74.2% of Alico shares are held by institutional investors. 39.0% of Fresh Del Monte Produce shares are held by company insiders. Comparatively, 60.1% of Alico shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Fresh Del Monte Produce and Alico’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fresh Del Monte Produce 2.79% 6.70% 4.25%
Alico -9.44% -2.23% -0.91%

Analyst Recommendations

This is a summary of current ratings for Fresh Del Monte Produce and Alico, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fresh Del Monte Produce 0 0 0 0 N/A
Alico 0 0 0 0 N/A

Volatility & Risk

Fresh Del Monte Produce has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, Alico has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Summary

Fresh Del Monte Produce beats Alico on 7 of the 11 factors compared between the two stocks.

Fresh Del Monte Produce Company Profile

Fresh Del Monte Produce Inc., through its subsidiaries, produces, markets, and distributes fresh and fresh-cut fruits and vegetables worldwide. It offers fresh produce products consisting of bananas, pineapples, melons, tomatoes, grapes, apples, pears, peaches, plums, nectarines, cherries, citrus, avocados, blueberries, strawberries, and kiwi; various vegetables, including potatoes, onions, bell peppers, and cucumbers; and various other fruits, such as plantains and mangos. The company also produces and distributes prepared fruits and vegetables, juices, beverages, snacks, poultry, and meat products. In addition, it engages in ocean freight business; and manufacturing plastic and box products, such as bins, trays, bags, and boxes. The company offers its products under the DEL MONTE brand, as well as under other brands, such as UTC, Rosy, Fruit Express, Just Juice, Fruitini, and other regional brands. It markets and distributes its products to retail stores, club stores, wholesalers, distributors, and foodservice operators. Fresh Del Monte Produce Inc. was founded in 1886 and is headquartered in Coral Gables, Florida.

Alico Company Profile

Alico, Inc., together with its subsidiaries, operates as an agribusiness and land management company in the United States. The company operates through three segments: Alico Citrus, Conservation and Environmental Resources, and Other Operations. The Alico Citrus segment engages in planting, owning, cultivating, and/or managing citrus groves to produce fruits for sale to fresh and processed citrus markets; and contracting for the harvesting, marketing, and hauling of citrus. The Conservation and Environmental Resources segment is involved in the activities related to cattle grazing, sod, native plant, and animal sales; and leasing, management, and/or conservation of unimproved native pasture land. The Other Operations segment engages in the activities related to rock mining royalties, oil exploration, and other lines of business; and ownership and/or lease of improved farmland. Alico, Inc. owned approximately 122,000 acres of land located in 12 counties in Florida, which include the Alachua, Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands, Lee, Martin, Osceola, and Polk. The company was founded in 1960 and is based in Fort Myers, Florida. Alico, Inc. is a subsidiary of 734 Investors, LLC.

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