Landec Corporation (NASDAQ: LNDC) and Limoneira (NASDAQ:LMNR) are both small-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, profitabiliy, risk, institutional ownership and valuation.

Valuation and Earnings

This table compares Landec Corporation and Limoneira’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Landec Corporation $540.14 million 0.72 $33.20 million $0.47 30.43
Limoneira $124.42 million 2.58 $22.57 million $0.78 28.59

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Landec Corporation and Limoneira, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Landec Corporation 0 1 1 0 2.50
Limoneira 0 0 2 0 3.00

Landec Corporation currently has a consensus target price of $13.00, indicating a potential downside of 9.09%. Limoneira has a consensus target price of $26.25, indicating a potential upside of 17.71%. Given Limoneira’s stronger consensus rating and higher probable upside, analysts plainly believe Limoneira is more favorable than Landec Corporation.

Risk and Volatility

Landec Corporation has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500. Comparatively, Limoneira has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Landec Corporation 2.38% 5.90% 3.74%
Limoneira 9.82% 9.09% 3.71%

Dividends

Limoneira pays an annual dividend of $0.22 per share and has a dividend yield of 1.0%. Landec Corporation does not pay a dividend. Limoneira pays out 28.2% of its earnings in the form of a dividend.

Insider & Institutional Ownership

92.1% of Landec Corporation shares are owned by institutional investors. Comparatively, 25.6% of Limoneira shares are owned by institutional investors. 4.9% of Landec Corporation shares are owned by insiders. Comparatively, 5.7% of Limoneira shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Limoneira beats Landec Corporation on 10 of the 16 factors compared between the two stocks.

Landec Corporation Company Profile

Landec Corporation designs, develops, manufactures and sells a range of health and wellness products for food and biomaterials markets. The Company licenses technology applications to partners. The Company operates through three segments: Packaged Fresh Vegetables, Food Export and Biomaterials. The Packaged Fresh Vegetables segment markets and packs specialty packaged whole and fresh-cut fruit and vegetables, the majority of which incorporate the BreatheWay specialty packaging for the retail grocery, club store and food services industry. The Food Export segment is engaged in the purchase and sale of whole commodity fruit and vegetable products primarily to Asia. The Biomaterials segment sells products utilizing hyaluronan, a polysaccharide that is distributed in the extracellular matrix of connective tissues in both animals and humans, and non-hyaluronan (HA) products for medical use primarily in the ophthalmic, orthopedic and other markets.

Limoneira Company Profile

Limoneira Company is engaged in agribusiness and real estate development. The Company’s operations consist of fruit production, sales and marketing, rental operations, real estate development and capital investment activities. The Company’s segments include lemon operations, other agribusiness, rental operations and real estate development. The Company has three business divisions: agribusiness, rental operations and real estate development. The Company operates its packinghouses in Santa Paula, California and Yuma, Arizona. The Company’s water resources include water rights, usage rights and pumping rights to the water in aquifers. The Company’s agribusiness includes farming, harvesting, lemon packing and lemon sales operations. The rental operations division includes residential and commercial rentals, leased land operations and organic recycling. The real estate development division includes developable land parcels, multi-family housing and single-family homes.

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