Critical Survey: Limoneira (NASDAQ:LMNR) & Coffee (NASDAQ:JVA)

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

Volatility and Risk

Limoneira has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500. Comparatively, Coffee has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Limoneira and Coffee, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Limoneira	1	2	3	0	2.33
Coffee	0	2	0	0	2.00

Limoneira currently has a consensus price target of $18.00, suggesting a potential upside of 38.78%. Coffee has a consensus price target of $9.00, suggesting a potential upside of 163.93%. Given Coffee’s higher possible upside, analysts clearly believe Coffee is more favorable than Limoneira.

Valuation and Earnings

This table compares Limoneira and Coffee”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Limoneira	$159.72 million	1.47	-$15.98 million	($2.28)	-5.69
Coffee	$96.28 million	0.20	$1.40 million	$0.28	12.18

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

Institutional & Insider Ownership

64.3% of Limoneira shares are held by institutional investors. 9.2% of Limoneira shares are held by company insiders. Comparatively, 22.1% of Coffee shares are held by company 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Limoneira	-30.50%	-13.94%	-7.86%
Coffee	1.53%	5.41%	3.61%

Summary

Coffee beats Limoneira on 9 of the 14 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 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.

About Coffee

Coffee Holding Co., Inc. engages in manufacturing, roasting, packaging, marketing, and distributing roasted and blended coffees in the United States, Australia, Canada, England, and China. It offers wholesale green coffee products, including unroasted raw beans that are sold to large, medium, and small roasters, as well as coffee shop operators; and roasts, blends, packages, and sells coffee under private labels in cans, brick packages, and instants of various sizes. The company also roasts and blends company label branded coffee to supermarkets, wholesalers, and individually owned stores; and sells tabletop coffee roasting equipment, instant coffees, and tea products for its customers. Its coffee brands include Cafe Caribe, Don Manuel, S&W, Cafe Supremo, Via Roma, Premier Roasters, and Harmony Bay. The company was formerly known as Transpacific International Group Corp and changed its name to Coffee Holding Co., Inc. in April 1998. Coffee Holding Co., Inc. was founded in 1971 and is headquartered in Staten Island, New York.