Consumer staples companies CHS Inc. and Adecoagro S.A. have drawn attention as investors assess which business offers better growth potential. This analysis contrasts their profitability, institutional ownership, earnings, dividends, valuations, and risk profiles.
Profitability Comparison
Profitability metrics provide insight into the financial health of both companies. As of the latest reports, CHS boasts a net margin of 1.69%, while Adecoagro’s is slightly lower at 1.67%. In terms of return on equity, CHS leads with 6.96% compared to Adecoagro’s 3.09%. However, when examining return on assets, CHS again shows stronger performance at 3.06% against Adecoagro’s 1.32%.
Ownership and Institutional Support
Institutional ownership can indicate confidence in a company’s long-term growth. Currently, 45.3% of Adecoagro shares are held by institutional investors, suggesting significant backing from large financial entities. In contrast, only 2.3% of CHS shares are owned by company insiders, while 6.7% of Adecoagro shares are insider-held. This disparity may reflect differing levels of insider confidence in their respective companies.
Valuation and Earnings Insights
When evaluating gross revenue, CHS significantly outpaces Adecoagro, reporting $35.46 billion compared to Adecoagro’s $1.52 billion. Moreover, CHS’s net income stands at $597.92 million, while Adecoagro reports $92.34 million. The price-to-sales ratio for Adecoagro is 0.50, while CHS does not have a publicly available ratio.
Analyst Ratings and Potential
Recent analyst ratings reveal a more favorable outlook for Adecoagro. According to MarketBeat.com, Adecoagro has a consensus price target of $9.60, indicating a potential upside of 25.74%. In contrast, CHS received no buy or strong buy ratings, reflecting a less optimistic perception among analysts. The breakdown of ratings suggests that the investment community views Adecoagro as a more attractive option at this juncture.
Risk and Volatility Assessment
Evaluating risk, CHS has a beta of 0.26, indicating its share price is 74% less volatile than the S&P 500. Adecoagro’s beta of 0.62 suggests it is still less volatile than the market, but by a smaller margin, at 38% less than the S&P 500. This information can guide investors who prioritize stability over potential high returns.
Company Profiles
CHS Inc., based in Inver Grove Heights, Minnesota, is an integrated agricultural company involved in providing grains, food, and energy resources globally. The company operates petroleum refineries and pipelines, as well as marketing refined fuels through a network of approximately 1,500 retail sites under the Cenex brand. CHS has been in operation since 1936.
Adecoagro S.A., founded in 2002 and based in Luxembourg, operates as an agro-industrial firm primarily in South America. It focuses on farming, sugar, ethanol, energy production, and land transformation. Adecoagro engages in diverse agricultural activities, including the cultivation of grains, oilseeds, and dairy products, making it a significant player in the region’s agricultural landscape.
In summary, while CHS leads in revenue and profitability metrics, Adecoagro’s stronger analyst ratings and institutional support suggest it may present a more favorable investment opportunity moving forward. Investors should consider these factors carefully when evaluating their options in the consumer staples sector.
