American Vanguard Corporation (NYSE: AVD) and Agrium (NYSE:AGU) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Institutional and Insider Ownership

76.9% of American Vanguard Corporation shares are owned by institutional investors. Comparatively, 66.3% of Agrium shares are owned by institutional investors. 4.7% of American Vanguard Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for American Vanguard Corporation and Agrium, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Vanguard Corporation 0 1 1 1 3.00
Agrium 0 6 9 0 2.60

American Vanguard Corporation currently has a consensus price target of $25.00, suggesting a potential upside of 11.61%. Agrium has a consensus price target of $112.50, suggesting a potential upside of 4.37%. Given American Vanguard Corporation’s stronger consensus rating and higher possible upside, research analysts clearly believe American Vanguard Corporation is more favorable than Agrium.

Profitability

This table compares American Vanguard Corporation and Agrium’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Vanguard Corporation 4.56% 5.10% 3.34%
Agrium 8.83% 35.33% 12.67%

Volatility & Risk

American Vanguard Corporation has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500. Comparatively, Agrium has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500.

Dividends

American Vanguard Corporation pays an annual dividend of $0.06 per share and has a dividend yield of 0.3%. Agrium pays an annual dividend of $3.50 per share and has a dividend yield of 3.2%. American Vanguard Corporation pays out 12.0% of its earnings in the form of a dividend. Agrium pays out 84.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agrium has increased its dividend for 5 consecutive years. Agrium is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares American Vanguard Corporation and Agrium’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Vanguard Corporation $318.49 million 2.09 $44.28 million $0.50 44.80
Agrium $13.56 billion 1.10 $1.62 billion $4.15 25.97

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

About American Vanguard Corporation

American Vanguard Corporation operates as a holding company. The Company conducts its business through its subsidiaries, AMVAC Chemical Corporation (AMVAC), GemChem, Inc. (GemChem), 2110 Davie Corporation (DAVIE), Quimica Amvac de Mexico S.A. de C.V. (AMVAC M), AMVAC Mexico Sociedad de Responsabilidad Limitada (AMVAC M Srl), AMVAC de Costa Rica Sociedad de Responsabilidad Limitada (AMVAC CR Srl), AMVAC Switzerland GmbH (AMVAC S), AMVAC do Brasil Representacoes Ltda (AMVAC B), AMVAC C.V. (AMVAC CV), AMVAC Netherlands BV (AMVAC BV), Envance Technologies, LLC (Envance), AMVAC Singapore Pte, Ltd (AMVAC Sgpr) and Huifeng AMVAC Innovation Co. Limited (Hong Kong JV). AMVAC is a specialty chemical manufacturer that develops and markets products for agricultural, commercial and consumer uses. It manufactures and formulates chemicals, such as insecticides, fungicides, herbicides, molluscicides and soil fumigants for crops, turf and ornamental plants, and human and animal health protection.

About Agrium

Agrium Inc. is a retailer of agricultural products and services in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay and a multi-national producer and wholesale marketer of nutrients for agricultural and industrial markets. The Company’s segments include Retail and Wholesale. As of December 31, 2016, its Retail business unit marketed crop nutrients, crop protection products, seed, merchandise, application and other agronomic services through 1,500 retail locations in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay. Its Wholesale business unit manufactures, mines and markets a range of nutrients, including nitrogen-based, potash and phosphate-based crop nutrient products. As of December 31, 2016, its Wholesale business unit owned and operated five North American nitrogen facilities, four located in Alberta, Canada and one in Borger, Texas, United States.

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