Financial Analysis: General Agriculture (GELT) vs. Limoneira (LMNR)

General Agriculture (OTCMKTS:GELT) and Limoneira (NASDAQ:LMNR) are both consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
General Agriculture N/A N/A N/A
Limoneira 15.91% 6.46% 2.93%

Institutional & Insider Ownership

50.3% of Limoneira shares are held by institutional investors. 4.5% of Limoneira shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for General Agriculture and Limoneira, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
General Agriculture 0 0 0 0 N/A
Limoneira 0 0 5 0 3.00

Limoneira has a consensus price target of $30.20, suggesting a potential upside of 37.52%. Given Limoneira’s higher possible upside, analysts plainly believe Limoneira is more favorable than General Agriculture.

Dividends

Limoneira pays an annual dividend of $0.30 per share and has a dividend yield of 1.4%. General Agriculture does not pay a dividend. Limoneira pays out 71.4% of its earnings in the form of a dividend. Limoneira has increased its dividend for 5 consecutive years.

Earnings and Valuation

This table compares General Agriculture and Limoneira’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
General Agriculture $27.42 million N/A $14.21 million N/A N/A
Limoneira $121.31 million 3.20 $6.59 million $0.42 52.29

General Agriculture has higher earnings, but lower revenue than Limoneira.

Risk and Volatility

General Agriculture has a beta of -0.23, meaning that its share price is 123% less volatile than the S&P 500. Comparatively, Limoneira has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500.

Summary

Limoneira beats General Agriculture on 11 of the 13 factors compared between the two stocks.

About General Agriculture

General Agriculture Corporation (GELT) is a producer of Gannan navel oranges in China. The Company is primarily engaged in planting, preserving, packaging and marketing navel oranges for distribution and sale throughout the People’s Republic of China. The Company’s land planting area totaled to 5,152 acres at September 30, 2016. Its own orchards land planting area totaled to 1,652 acres at September 30, 2016. Its leased orchards land planting area totaled to 3,500 acres at September 30, 2016. As of September 30, 2016, the Company’s products were sold through distributors in approximately 11 provinces of China, including Jiangxi, Beijing, Shanghai, Zhejiang, Guangxi, Shandong, Guangdong, Anhui, Helongjiang, Inner Mongolia and Jiangsu. The Company is a producer of Gannan navel oranges in China, with operations that include the planting, growing, harvesting, post-harvest processing and temperature-controlled preservation and storage of its navel oranges.

About Limoneira

Limoneira Company operates as an agribusiness and real estate development company in the United States and internationally. The company operates through six segments: Fresh Lemons, Lemon Packing, Avocados, Other Agribusiness, Rental Operations, and Real Estate Development. The Fresh Lemons segment markets and sells lemons directly to food service, wholesale, and retail customers. It has approximately 4,800 acres of lemons. The Lemon Packing segment engages in lemon packing, and shipping and handling activities. This segment also processes, packs, and sells lemons grown by others. The Avocados segment grows avocados. This segment has approximately 900 acres of avocados. The Other Agribusiness segment grows oranges and specialty citrus; and other crops, including Moro blood oranges, Cara Cara oranges, Minneola tangelos, Star Ruby grapefruit, pummelos, pistachios, and wine grapes. This segment has approximately 1,500 acres of oranges; and approximately 1,000 acres of specialty citrus and other crops. The Rental Operations segment owns and maintains approximately 245 residential housing units; and commercial properties, such as office buildings and a multi-use facility, as well as leases approximately 500 acres of its land to third-party agricultural tenants. It is also involved in organic recycling operations. The Real Estate Development segment develops parcels, multi-family housing, and single-family homes. The company has its agricultural plantings in Ventura, Tulare, San Bernardino, and San Luis Obispo counties in California; Yuma county in Arizona; and La Serena, Chile. Limoneira 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. The company was founded in 1893 and is headquartered in Santa Paula, California.

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