Calavo Growers (CVGW) & Archer Daniels Midland Company (ADM) Financial Review
Archer Daniels Midland Company (NYSE: ADM) and Calavo Growers (NASDAQ:CVGW) are both consumer staples companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitabiliy, earnings, dividends and risk.
Archer Daniels Midland Company pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. Calavo Growers pays an annual dividend of $0.90 per share and has a dividend yield of 1.2%. Archer Daniels Midland Company pays out 55.0% of its earnings in the form of a dividend. Calavo Growers pays out 41.1% 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. Archer Daniels Midland Company has raised its dividend for 41 consecutive years. Archer Daniels Midland Company is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
Archer Daniels Midland Company has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, Calavo Growers has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500.
Valuation and Earnings
This table compares Archer Daniels Midland Company and Calavo Growers’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Archer Daniels Midland Company||$62.95 billion||0.38||$2.58 billion||$2.18||19.24|
|Calavo Growers||$957.66 million||1.34||$69.32 million||$2.19||33.36|
Archer Daniels Midland Company has higher revenue and earnings than Calavo Growers. Archer Daniels Midland Company is trading at a lower price-to-earnings ratio than Calavo Growers, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings for Archer Daniels Midland Company and Calavo Growers, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Archer Daniels Midland Company||1||8||1||0||2.00|
Archer Daniels Midland Company currently has a consensus price target of $46.43, suggesting a potential upside of 10.68%. Calavo Growers has a consensus price target of $72.75, suggesting a potential downside of 0.41%. Given Archer Daniels Midland Company’s higher probable upside, equities research analysts clearly believe Archer Daniels Midland Company is more favorable than Calavo Growers.
This table compares Archer Daniels Midland Company and Calavo Growers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Archer Daniels Midland Company||2.05%||7.19%||3.19%|
Insider & Institutional Ownership
73.1% of Archer Daniels Midland Company shares are owned by institutional investors. Comparatively, 68.0% of Calavo Growers shares are owned by institutional investors. 3.2% of Archer Daniels Midland Company shares are owned by insiders. Comparatively, 10.2% of Calavo Growers shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Calavo Growers beats Archer Daniels Midland Company on 10 of the 17 factors compared between the two stocks.
Archer Daniels Midland Company Company Profile
Archer-Daniels-Midland Company is a processor of oilseeds, corn, wheat, cocoa and other agricultural commodities. The Company manufactures protein meal, vegetable oil, corn sweeteners, flour, biodiesel, ethanol, and other food and feed ingredients. Its segments include Agricultural Services, which utilizes its United States grain elevator, global transportation network and port operations to buy, store, clean and transport agricultural commodities, such as oilseeds, wheat, milo, oats, rice and barley, and resells these commodities primarily as food and feed ingredients and as raw materials for the agricultural processing industry; Corn Processing, which is engaged in corn wet milling and dry milling activities; Oilseeds Processing, which includes global activities related to the origination, merchandising, crushing and further processing of oilseeds; Wild Flavors and Specialty Ingredients products, which include flavors, sweeteners and health ingredients; Other, and Corporate.
Calavo Growers Company Profile
Calavo Growers, Inc. operates in the avocado industry. The Company provides value-added fresh food. The Company distributes its products both domestically and internationally and internationally. It operates in three business segments: Fresh products, Calavo Foods and Renaissance Food Group, LLC (RFG). The Company is engaged in marketing and distributing avocados, prepared avocados and other perishable foods, which allows it to deliver an array of fresh and prepared food products to food distributors, produce wholesalers, supermarkets, convenience stores and restaurants on a worldwide basis. The Company procures avocados principally from California and Mexico. Through its various operating facilities, the Company sorts, packs, and/or ripens avocados, tomatoes and/or Hawaiian grown papayas; processes and packages fresh cut fruit and vegetables, salads, wraps, sandwiches, fresh snacking products and a range of behind-the-glass deli items, and produces and packages guacamole and salsa.
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