Limoneira Keeps Quarterly Dividend at $0.075 a Share, Payable Oct. 18 to Stockholders of Record Oct. 7

Investors interested in Agriculture - Operations stocks are likely familiar with Dole (DOLE) and Limoneira (LMNR). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Dole is sporting a Zacks Rank of #1 (Strong Buy), while Limoneira has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DOLE has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

DOLE currently has a forward P/E ratio of 13.87, while LMNR has a forward P/E of 96.80. We also note that DOLE has a PEG ratio of 2.71. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. LMNR currently has a PEG ratio of 6.45.

Another notable valuation metric for DOLE is its P/B ratio of 1.08. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, LMNR has a P/B of 2.46.

These are just a few of the metrics contributing to DOLE's Value grade of A and LMNR's Value grade of D.

DOLE is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that DOLE is likely the superior value option right now.

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Limoneira Company has significantly raised its expectations on avocado volumes this year to take advantage of higher prices for the fruit.

“We now expect avocado volumes to be in the range of 14.5 million to 15.5 million pounds for fiscal year 2024 compared to previous guidance of 9 million to 10 million pounds, a more than 50% increase compared to prior guidance,” CEO Harold Edwards said on Monday during a third-quarter earnings call with analysts.

“We expect to complete the avocado harvest in the fourth quarter with approximately 4 million to 5 million pounds remaining. Keep in mind, we expect our fourth quarter to represent a record in avocado volume due to our timing and ability to hold the fruit to match a higher pricing environment.”

The company recorded $13.9 million of avocado revenue in the third quarter of fiscal year 2024, compared to $3.5 million in the third quarter of last fiscal year.

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About 8.86 million pounds of avocados were sold in aggregate during the third quarter of fiscal year 2024 at a $1.57 average price per pound, compared to approximately 2.82 million pounds sold at a $0.99 average price per pound during the third quarter of fiscal year 2023.

Limoneira posted $63.3 million in net revenue for this year’s third quarter, up from $52.5 million a year ago.

Limoneira expects to expand avocado production by 1,000 acres over the next three years to take advantage of robust consumer demand but expects volume to be lower next year as a result of the yearly alternate bearing nature of avocado trees, CFO Mark Palamountain said.

The company expects avocado pricing to be lower in 2025 despite forecasting lower volume that year, he said.

“The company believes avocado pricing may be slightly lower compared to the current year pricing environment due to international circumstances,” he said.

Price Action: Shares of Limoneira were down 3.2% to $24.20 at the time of publication Tuesday.

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