Financial Review: Adecoagro (AGRO) & Royal Hawaiian Orchards (NNUTU)

Adecoagro (NYSE:AGRO) and Royal Hawaiian Orchards (OTCMKTS:NNUTU) are both small-cap consumer staples companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, dividends, analyst recommendations, institutional ownership, valuation and profitability.

Profitability

This table compares Adecoagro and Royal Hawaiian Orchards’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Adecoagro -1.88% 16.18% 6.80%
Royal Hawaiian Orchards 15.60% 3.73% 3.07%

Institutional & Insider Ownership

40.9% of Adecoagro shares are owned by institutional investors. 7.9% of Royal Hawaiian Orchards shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Adecoagro and Royal Hawaiian Orchards, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Adecoagro 0 3 1 0 2.25
Royal Hawaiian Orchards 0 0 0 0 N/A

Adecoagro currently has a consensus target price of $10.00, indicating a potential upside of 42.86%. Given Adecoagro’s higher possible upside, research analysts clearly believe Adecoagro is more favorable than Royal Hawaiian Orchards.

Volatility & Risk

Adecoagro has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, Royal Hawaiian Orchards has a beta of -2636.33, meaning that its stock price is 263,733% less volatile than the S&P 500.

Valuation and Earnings

This table compares Adecoagro and Royal Hawaiian Orchards’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Adecoagro $933.18 million 0.91 $9.97 million $0.08 87.50
Royal Hawaiian Orchards $32.19 million 1.38 $1.18 million N/A N/A

Adecoagro has higher revenue and earnings than Royal Hawaiian Orchards.

Summary

Adecoagro beats Royal Hawaiian Orchards on 9 of the 12 factors compared between the two stocks.

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 engages in the planting, harvesting, and sale of grains, oilseeds, and fibers including wheat, corn, soybeans, cotton, sunflowers, and other; provision of grain warehousing/conditioning, handling, and drying services to third parties; and purchase and sale of crops produced by third parties. It is involved in planting, harvesting, processing, and marketing of rice; and producing and selling fluid milk and other dairy products. In addition, the company engages 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, 2017, the company owned a total of 246,139 hectares, including 19 farms in Argentina, 11 farms in Brazil, and 1 farm in Uruguay; 3 rice processing facilities in Argentina; and 2 dairy facilities with approximately 6,967 milking cows in Argentina. It also had 11 grain and rice conditioning and storage plants in Argentina; and 3 sugar and ethanol mills in Brazil with a sugarcane crushing capacity of 12.3 million tons, as well as had a total of 232 megawatts of installed cogeneration capacity. The company was founded in 2002 and is based in Luxembourg City, Luxembourg.

Royal Hawaiian Orchards Company Profile

Hawaiian Macadamia Nut Orchards, L.P. produces, markets, and distributes macadamia nut-based products in the United States. The company operates in two business segments, Orchards and Branded Products. The Orchards segment sells wet-in-shell and dry-in-shell macadamia nuts, and nut kernel. It also provides contract farming services and leases orchards. The Branded Products segment sells bulk kernel under the brand name of ROYAL HAWAIIAN ORCHARDS. The company owns or leases approximately 5,010 tree acres of macadamia orchards in two locations on the island of Hawaii, as well as 641 tree acres to another party. It also farms approximately 433 tree acres of macadamia orchards in Hawaii for other orchard owners. The company was formerly known as Royal Hawaiian Orchards, L.P. and changed its name to Hawaiian Macadamia Nut Orchards, L.P. in September 2018. Hawaiian Macadamia Nut Orchards, L.P. was founded in 1986 and is based in Hilo, Hawaii.

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