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

Institutional and Insider Ownership

49.4% of Limoneira shares are held by institutional investors. 4.5% of Limoneira shares are held by insiders. Comparatively, 7.9% of Royal Hawaiian Orchards shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Limoneira and Royal Hawaiian Orchards’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Limoneira $121.31 million 3.57 $6.59 million $0.42 58.29
Royal Hawaiian Orchards $32.19 million 1.38 $1.18 million N/A N/A

Limoneira has higher revenue and earnings than Royal Hawaiian Orchards.

Profitability

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

Net Margins Return on Equity Return on Assets
Limoneira 15.91% 6.46% 2.93%
Royal Hawaiian Orchards 15.60% 3.73% 3.07%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Limoneira and Royal Hawaiian Orchards, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Limoneira 0 0 5 0 3.00
Royal Hawaiian Orchards 0 0 0 0 N/A

Limoneira presently has a consensus price target of $30.20, indicating a potential upside of 23.37%. Given Limoneira’s higher possible upside, research analysts plainly believe Limoneira is more favorable than Royal Hawaiian Orchards.

Volatility & Risk

Limoneira has a beta of 0.85, meaning that its stock price is 15% 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.

Dividends

Limoneira pays an annual dividend of $0.25 per share and has a dividend yield of 1.0%. Royal Hawaiian Orchards does not pay a dividend. Limoneira pays out 59.5% of its earnings in the form of a dividend. Limoneira has increased its dividend for 4 consecutive years.

Summary

Limoneira beats Royal Hawaiian Orchards on 12 of the 15 factors compared between the two stocks.

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.

About Royal Hawaiian Orchards

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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