Monsanto (NYSE: MON) and American Vanguard Corporation (NYSE:AVD) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.
Risk and Volatility
Monsanto has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, American Vanguard Corporation has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.
Institutional and Insider Ownership
74.8% of Monsanto shares are held by institutional investors. Comparatively, 76.9% of American Vanguard Corporation shares are held by institutional investors. 0.8% of Monsanto shares are held by insiders. Comparatively, 4.7% of American Vanguard Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Monsanto pays an annual dividend of $2.16 per share and has a dividend yield of 1.8%. American Vanguard Corporation pays an annual dividend of $0.06 per share and has a dividend yield of 0.3%. Monsanto pays out 46.8% of its earnings in the form of a dividend. American Vanguard Corporation pays out 12.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Monsanto has raised its dividend for 7 consecutive years. Monsanto is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Monsanto and American Vanguard Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Monsanto||$14.52 billion||3.58||$4.19 billion||$4.62||25.60|
|American Vanguard Corporation||$318.49 million||1.94||$44.28 million||$0.50||41.50|
Monsanto has higher revenue and earnings than American Vanguard Corporation. Monsanto 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.
This is a breakdown of recent ratings and recommmendations for Monsanto and American Vanguard Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American Vanguard Corporation||0||1||1||1||3.00|
Monsanto currently has a consensus price target of $123.25, suggesting a potential upside of 4.21%. American Vanguard Corporation has a consensus price target of $19.50, suggesting a potential downside of 6.02%. Given Monsanto’s higher possible upside, research analysts plainly believe Monsanto is more favorable than American Vanguard Corporation.
This table compares Monsanto and American Vanguard Corporation’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%|
Monsanto beats American Vanguard Corporation on 11 of the 18 factors compared between the two stocks.
Monsanto Company Profile
Monsanto Company (Monsanto), along with its subsidiaries, is a provider of agricultural products for farmers. The Company provides seeds, biotechnology trait products, herbicides and digital agriculture tools to farmers. The Company operates through two segments: Seeds and Genomics, and Agricultural Productivity. Through its Seeds and Genomics segment, the Company produces seed brands, including DEKALB, Asgrow, Deltapine, Seminis and De Ruiter, and it develops biotechnology traits that assist farmers in controlling insects and weeds and digital agriculture to assist farmers in decision-making. The Seeds and Genomics segment offers products, such as Germplasm and Biotechnology traits. Through its Agricultural Productivity segment, the Company manufactures Roundup brand herbicides and other herbicides and provides lawn-and-garden herbicide products for the residential market.
American Vanguard Corporation Company Profile
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.
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