Critical Analysis: Adecoagro (NYSE:AGRO) vs. Dole (NYSE:DOLE)

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

Valuation and Earnings

This table compares Adecoagro and Dole”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adecoagro	$1.43 billion	0.89	-$6.76 million	($0.08)	-159.39
Dole	$9.17 billion	0.16	$51.32 million	$0.53	28.50

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

Risk and Volatility

Adecoagro has a beta of 0.08, meaning that its share price is 92% less volatile than the S&P 500. Comparatively, Dole has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Institutional & Insider Ownership

45.3% of Adecoagro shares are owned by institutional investors. 6.7% of Adecoagro shares are owned by company insiders. Comparatively, 41.8% of Dole shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Adecoagro and Dole’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Adecoagro	-0.55%	-1.17%	-0.46%
Dole	0.56%	7.81%	2.55%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Adecoagro and Dole, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adecoagro	1	5	1	0	2.00
Dole	0	3	0	0	2.00

Adecoagro presently has a consensus price target of $11.53, indicating a potential downside of 9.55%. Dole has a consensus price target of $15.50, indicating a potential upside of 2.62%. Given Dole’s higher possible upside, analysts clearly believe Dole is more favorable than Adecoagro.

Dividends

Adecoagro pays an annual dividend of $0.35 per share and has a dividend yield of 2.7%. Dole pays an annual dividend of $0.34 per share and has a dividend yield of 2.3%. Adecoagro pays out -437.5% of its earnings in the form of a dividend. Dole pays out 64.2% 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. Adecoagro has raised its dividend for 3 consecutive years and Dole has raised its dividend for 1 consecutive years. Adecoagro is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Dole beats Adecoagro on 10 of the 16 factors compared between the two stocks.

About Adecoagro

Adecoagro S.A. operates as an agro-industrial company in South America. The company mainly operates through three segments: Farming; Sugar, Ethanol and Energy; and Land Transformation. It engages in farming crops, rice and other agricultural products, dairy operations, and land transformation activities, as well as sugar, ethanol, and energy production activities. The company is involved in the planting, harvesting, and sale of grains, oilseeds, and fibers, including wheat, corn, soybeans, peanuts, cotton, sunflowers, and others; provision of grain warehousing/conditioning, handling, and drying services to third parties; and purchase and sale of crops produced by third parties. It also plants, harvests, processes, and markets rice; and produces and sells raw milk, UHT, cheese, and powder milk. In addition, the company engages in the cultivating and transforming of sugarcane into ethanol, sugar, and electricity. Further, it is involved in the identification and acquisition of underdeveloped and undermanaged farmland, and the realization of value through the strategic disposition of assets. Adecoagro S.A. was founded in 2002 and is based in Luxembourg, Luxembourg.

About Dole

Dole Food Company, Inc. (Dole) is a producer, marketer and distributor of fresh fruit and fresh vegetables. The Company is a producer of bananas and pineapples, and packaged fruit products, packaged salads and fresh-packed vegetables. The Company has three business segments: fresh fruit, fresh vegetables and packaged foods. The fresh fruit segment contains operating divisions that produce and market fresh fruit to wholesale, retail and institutional customers worldwide. The fresh vegetables segment produces and markets fresh-packed and value-added vegetables and salads to wholesale, retail and institutional customers, primarily in North America and Europe. The packaged foods segment contains several operating divisions that produce and market packaged foods, including fruit, juices, frozen fruit and healthy snack foods. In November 2013, Dole Food Company, Inc announced that an investor group acquired the remaining 60.43% interest in the Company.