Critical Analysis: Limoneira (NASDAQ:LMNR) versus Post (NYSE:POST)

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Post and Limoneira, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Post	2	2	5	0	2.33
Limoneira	2	0	2	1	2.40

Post currently has a consensus target price of $103.43, indicating a potential upside of 24.27%. Limoneira has a consensus target price of $16.50, indicating a potential upside of 55.08%. Given Limoneira’s stronger consensus rating and higher probable upside, analysts clearly believe Limoneira is more favorable than Post.

Valuation and Earnings

This table compares Post and Limoneira”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Post	$8.41 billion	0.45	$335.70 million	$5.44	15.30
Limoneira	$128.76 million	1.50	-$15.98 million	($2.39)	-4.45

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

Institutional and Insider Ownership

94.8% of Post shares are held by institutional investors. Comparatively, 64.3% of Limoneira shares are held by institutional investors. 14.1% of Post shares are held by company insiders. Comparatively, 9.2% of Limoneira shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Post	3.48%	13.22%	3.42%
Limoneira	-33.03%	-13.91%	-7.50%

Volatility and Risk

Post has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500. Comparatively, Limoneira has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500.

Summary

Post beats Limoneira on 11 of the 15 factors compared between the two stocks.

About Post

Post Holdings, Inc. operates as a consumer packaged goods holding company in the United States and internationally. It operates through four segments: Post Consumer Brands, Weetabix, Foodservice, and Refrigerated Retail. The Post Consumer Brands segment manufactures, markets, and sells branded and private label ready-to-eat (RTE) cereals under Honey Bunches of Oats, Pebbles, and Malt-O-Meal brand names; hot cereal; peanut butter under the Peter Pan brand; and branded and private label dog and cat food products under Rachael Ray Nutrish, Nature's Recipe, 9Lives, Kibbles 'n Bits and Gravy Train brand names. The Weetabix segment primarily manufactures, markets, and distributes branded and private label RTE cereal under Weetabix and Alpen brands; hot cereals and other cereal-based food products; breakfast drinks; protein-based shakes under the UFIT brand, and nutritional snacks, such as muesli. The Foodservice segment produces and distributes egg products primarily under Papetti's and Abbotsford Farms brands, as well as potato products in the foodservice and food ingredient channels. The segment also manufactures certain meat products. The Refrigerated Retail segment produces and distributes side dish, potato, sausage products under Bob Evans, Bob Evans Farms, and Simply Potatoes brands; eggs and egg products under Bob Evans Egg Whites and Egg Beaters brands; and cheese, and other dairy and refrigerated products under Crystal Farms brand. It serves grocery stores, mass merchandise customers, supercenters, club stores, natural/specialty stores, dollar stores, discounters, wholesalers, convenience stores, pet supply retailers, drug store customers, foodservice distributors, and national restaurant chains, as well as sells its products in the military, ecommerce, and foodservice channels. The company was founded in 1895 and is headquartered in Saint Louis, Missouri.

About Limoneira

Limoneira Company operates as an agribusiness and real estate development company in the United States and internationally. The company operates through three divisions: Agribusiness, Rental Operations, and Real Estate Development. It grows, processes, packs, markets, and sells lemons. The company also grows avocado, oranges, and specialty citrus and other crops, including Moro blood oranges, Cara Cara oranges, Valencia oranges, Minneola tangelos, Star Ruby grapefruit, pummelos, and wine grapes. It has approximately 3,500 acres of lemons planted primarily in Ventura, Tulare, San Luis Obispo, and San Bernardino Counties in California; and Jujuy, Argentina, as well in Yuma County, Arizona, and La Serena, Chile; 1,200 acres of avocados planted in Ventura County; 100 acres of oranges planted in Tulare County, California; and 400 acres of specialty citrus and other crops. In addition, the company rents residential housing units and commercial office buildings, as well as leases approximately 400 acres of its land to third-party agricultural tenants. Further, it is involved in the organic recycling operations; and development of land parcels, multi-family housing, and single-family homes. The company markets and sells its lemons directly to food service, wholesale, and retail customers; avocados, oranges, specialty citrus, and other crops to third-party packinghouses; and wine grapes to wine producers. Limoneira Company was founded in 1893 and is headquartered in Santa Paula, California.