Contrasting Bunge (BG) & Limoneira (LMNR)

Bunge (NYSE:BG) and Limoneira (NASDAQ:LMNR) are both basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Institutional & Insider Ownership

81.5% of Bunge shares are held by institutional investors. Comparatively, 51.2% of Limoneira shares are held by institutional investors. 1.3% of Bunge shares are held by company insiders. Comparatively, 4.5% of Limoneira shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Bunge 0.58% 6.79% 1.91%
Limoneira 4.91% 3.79% 1.90%

Earnings & Valuation

This table compares Bunge and Limoneira’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bunge $45.74 billion 0.16 $267.00 million $2.72 19.43
Limoneira $129.39 million 3.26 $20.18 million $0.50 47.46

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

Dividends

Bunge pays an annual dividend of $2.00 per share and has a dividend yield of 3.8%. Limoneira pays an annual dividend of $0.30 per share and has a dividend yield of 1.3%. Bunge pays out 73.5% of its earnings in the form of a dividend. Limoneira pays out 60.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Bunge has increased its dividend for 17 consecutive years and Limoneira has increased its dividend for 5 consecutive years. Bunge is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Bunge has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Limoneira has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Bunge and Limoneira, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bunge 0 2 3 0 2.60
Limoneira 0 0 5 0 3.00

Bunge presently has a consensus price target of $74.60, suggesting a potential upside of 41.13%. Limoneira has a consensus price target of $30.20, suggesting a potential upside of 27.27%. Given Bunge’s higher possible upside, equities analysts plainly believe Bunge is more favorable than Limoneira.

Summary

Bunge beats Limoneira on 9 of the 17 factors compared between the two stocks.

About Bunge

Bunge Limited operates as an agribusiness and food company worldwide. It operates in five segments: Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer. The Agribusiness segment purchases, stores, transports, processes, and sells agricultural commodities and commodity products, including oilseeds primarily soybeans, rapeseed, canola, and sunflower seeds, as well as grains primarily wheat and corn; and vegetable oils and protein meals. It provides its products for animal feed manufacturers, livestock producers, wheat and corn millers, and other oilseed processors, as well as third-party edible oil processing companies; and for industrial and biodiesel production applications. The Edible Oil Products segment provides packaged and bulk oils and fats, including cooking oils, shortenings, margarines, mayonnaise, and others for baked goods companies, snack food producers, confectioners, restaurant chains, foodservice operators, infant nutrition companies, and other food manufacturers, as well as grocery chains, wholesalers, distributors, and other retailers. The Milling Products segment offers wheat flours and bakery mixes; corn milling products that include dry-milled corn meals and flours, wet-milled masa and flours, and flaking and brewer's grits, as well as soy-fortified corn meal, corn-soy blends, and other products; whole grain and fiber ingredients; and milled rice products. The Sugar and Bioenergy segment produces sugar and ethanol; and generates electricity from burning sugarcane bagasse. As of December 31, 2018, it had a total installed cogeneration capacity of approximately 322 megawatts. The Fertilizer segment offers nitrogen, phosphate, and potassium fertilizers; and SSP, ammonia, ammonium thiosulfate, monoammonium phosphate, diammonium phosphate, triple supersphosphate, urea, urea-ammonium nitrate, ammonium sulfate, and potassium chloride. The company was founded in 1818 and is headquartered in White Plains, New York.

About Limoneira

Limoneira Company operates as an agribusiness and real estate development company in the United States and internationally. The company operates in six segments: Fresh Lemons, Lemon Packing, Avocados, Other Agribusiness, Rental Operations, and Real Estate Development. It grows, processes, packs, markets, and sells lemons. The company also grows avocado; oranges; and specialty citrus and other crops, including Moro blood oranges, Cara Cara oranges, Minneola tangelos, Star Ruby grapefruit, pummelos, pistachios, and wine grapes. It has approximately 5,000 acres of lemons planted primarily in Ventura, Tulare, and San Bernardino Counties in California, as well in Yuma County, Arizona; 900 acres of avocados planted in Ventura County; 1,600 acres of oranges planted in Tulare County, California; and 1,000 acres of specialty citrus and other crops. In addition, the company rents residential housing units; commercial office buildings; and a multi-use facility comprising a retail convenience store, gas station, car wash, and quick-serve restaurant, as well as leases approximately 500 acres of its land to third-party agricultural tenants. Further, it is involved in organic recycling operations; and the development of land parcels, multi-family housing, and single-family homes. The 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. Limoneira Company was founded in 1893 and is headquartered in Santa Paula, California.

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