Investors are weighing options between two small-cap consumer staples companies, Calavo Growers (NASDAQ: CVGW) and Dole Food Company (NYSE: DOLE). Both firms have distinct profiles, yet differing financial metrics and market positions may influence investment decisions.
Volatility and Risk Analysis
In terms of stock price volatility, Calavo Growers exhibits a beta of 0.41. This figure indicates that its stock is approximately 59% less volatile than the S&P 500. Dole, on the other hand, has a beta of 0.65, suggesting a 35% lower volatility compared to the benchmark index. These metrics may appeal to risk-averse investors looking for stability in their portfolios.
Earnings and Valuation Insights
When evaluating earnings, Dole outpaces Calavo Growers in both gross revenue and earnings per share. However, Calavo Growers currently trades at a lower price-to-earnings ratio, which implies it may offer more attractive entry points for investors. Calavo’s valuation suggests it is more affordable relative to its earnings potential.
In the realm of dividends, Calavo Growers pays an annual dividend of $0.80 per share, yielding 3.7%. Dole offers a smaller dividend of $0.34 per share with a yield of 2.5%. Notably, Calavo Growers has a payout ratio of 90.9%, indicating it uses a significant portion of its earnings to fund dividends. Dole’s payout ratio stands at 226.7%, raising concerns about its sustainability in dividend payments.
Both companies have increased their dividends for one consecutive year, but Calavo Growers stands out as the superior choice for dividend investors due to its higher yield and more manageable payout ratio.
Analyst Ratings and Institutional Ownership
Recent analyst ratings, as reported by MarketBeat, reflect a consensus price target for Calavo Growers of $40.00, suggesting a potential upside of 82.65%. Dole’s consensus price target is $16.00, indicating a more modest upside of 15.50%. Analysts appear to favor Calavo Growers based on these metrics, highlighting its stronger outlook.
Institutional ownership provides additional context for investor confidence. Approximately 81.3% of Calavo Growers shares are held by institutional investors, while 41.8% of Dole’s shares are owned by insiders. High institutional ownership is often viewed as a positive indicator, suggesting that large investors anticipate long-term growth.
Profitability Comparison
In comparing profitability metrics, Calavo Growers outperforms Dole in multiple areas, including net margins and return on equity. These factors contribute to Calavo’s favorable position as a contender for investors seeking sound financial health.
Company Profiles
Calavo Growers, Inc., founded in 1924 and headquartered in Santa Paula, California, specializes in marketing and distributing avocados and various perishable foods. Its operations are divided into two segments: Grown and Prepared. The Grown segment focuses on avocados, tomatoes, and papayas sourced from regions like California, Mexico, Peru, and Colombia. The Prepared segment offers a range of products, including prepared avocado items and fresh-cut fruits and vegetables.
Dole Food Company, Inc. is a global producer and distributor of fresh fruits and vegetables, notably bananas and pineapples. The company operates through three primary segments: fresh fruit, fresh vegetables, and packaged foods. Dole’s fresh fruit segment markets products to a range of customers, including wholesale and retail, while its fresh vegetables segment primarily serves North American and European markets.
Overall, Calavo Growers outperforms Dole across multiple investment metrics, making it a compelling option for investors seeking growth in the consumer staples sector. As both companies continue to navigate the market, the choice between them will ultimately depend on individual investment strategies and risk tolerance.
