Financial Survey: Alico (NASDAQ:ALCO) vs. Marzetti (NASDAQ:MZTI)

Alico (NASDAQ:ALCO) and Marzetti (NASDAQ:MZTI) are both consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, institutional ownership, profitability and risk.

Dividends

Alico pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Marzetti pays an annual dividend of $4.00 per share and has a dividend yield of 3.8%. Alico pays out 90.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Marzetti pays out 57.4% of its earnings in the form of a dividend. Marzetti has increased its dividend for 62 consecutive years. Marzetti is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

62.3% of Alico shares are held by institutional investors. Comparatively, 66.4% of Marzetti shares are held by institutional investors. 6.7% of Alico shares are held by insiders. Comparatively, 29.3% of Marzetti shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Alico and Marzetti”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alico	$17.07 million	16.09	-$147.33 million	$0.22	168.23
Marzetti	$1.93 billion	1.49	$191.61 million	$6.97	15.11

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Alico and Marzetti, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alico	0	1	1	1	3.00
Marzetti	1	2	0	0	1.67

Alico presently has a consensus price target of $45.00, suggesting a potential upside of 21.59%. Marzetti has a consensus price target of $135.00, suggesting a potential upside of 28.17%. Given Marzetti’s higher possible upside, analysts plainly believe Marzetti is more favorable than Alico.

Profitability

This table compares Alico and Marzetti’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alico	8.98%	-20.77%	-11.09%
Marzetti	9.93%	18.22%	13.43%

Risk and Volatility

Alico has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Marzetti has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500.

Summary

Marzetti beats Alico on 12 of the 18 factors compared between the two stocks.

About Alico

Alico, Inc., together with its subsidiaries, operates as an agribusiness and land management company in the United States. The company operates in two segments, Alico Citrus, and Land Management and Other Operations. The Alico Citrus segment engages in planting, owning, cultivating, and/or managing citrus groves to produce fruit for sale to fresh and processed citrus markets, including activities related to the purchase and resale of fruit and value-added services, which include contracting for the harvesting, marketing, and hauling of citrus. The Land Management and Other Operations segment is involved in the activities related to native plant sales, grazing and hunting leasing, management, and/or conservation of unimproved native pastureland; and activities related to rock mining royalties and other insignificant lines of business, as well as in the activities related to owning and/or leasing improved farmland. The company was incorporated in 1960 and is based in Fort Myers, Florida.

About Marzetti

Lancaster Colony Corporation engages in the manufacturing and marketing of specialty food products for the retail and foodservice channels in the United States. It operates in two segments, Retail and Foodservice. The company offers frozen garlic bread under the New York BRAND Bakery; frozen Parkerhouse style yeast and dinner rolls under the Sister Schubert's brand; salad dressings under the Marzetti, Simply Dressed, Cardini's, and Girard's brands; vegetable and fruit dips under the Marzetti brand; croutons and salad toppings under the New York BRAND Bakery, Chatham Village, and Marzetti brands; and frozen pasta under the Marzetti Frozen Pasta brand. It also manufactures and sells other products to brand license agreements, including Olive Garden dressings, Buffalo Wild Wings sauces, and Chick-fil-A sauces. The company sells its products through sales personnel, food brokers, and distributors to retailers and restaurants. Lancaster Colony Corporation was incorporated in 1961 and is based in Westerville, Ohio.