American Vanguard Corporation (NYSE: AVD) and Monsanto (NYSE:MON) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Insider & Institutional Ownership

76.9% of American Vanguard Corporation shares are held by institutional investors. Comparatively, 74.8% of Monsanto shares are held by institutional investors. 4.7% of American Vanguard Corporation shares are held by insiders. Comparatively, 0.8% of Monsanto shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares American Vanguard Corporation and Monsanto’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Vanguard Corporation $318.49 million 1.87 $44.28 million $0.50 39.90
Monsanto $14.52 billion 3.54 $4.19 billion $4.62 25.29

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.

Analyst Recommendations

This is a summary of recent ratings and price targets for American Vanguard Corporation and Monsanto, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Vanguard Corporation 0 1 1 1 3.00
Monsanto 0 7 8 0 2.53

American Vanguard Corporation currently has a consensus target price of $19.50, suggesting a potential downside of 2.26%. Monsanto has a consensus target price of $123.62, suggesting a potential upside of 5.79%. Given Monsanto’s higher probable upside, analysts clearly believe Monsanto is more favorable than American Vanguard Corporation.

Risk and Volatility

American Vanguard Corporation has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500. Comparatively, Monsanto has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Profitability

This table compares American Vanguard Corporation and Monsanto’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 14.11% 45.26% 11.37%

Dividends

American Vanguard Corporation pays an annual dividend of $0.06 per share and has a dividend yield of 0.3%. Monsanto pays an annual dividend of $2.16 per share and has a dividend yield of 1.8%. American Vanguard Corporation pays out 12.0% of its earnings in the form of a dividend. Monsanto pays out 46.8% 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. American Vanguard Corporation has increased its dividend for 7 consecutive years.

Summary

Monsanto beats American Vanguard Corporation on 10 of the 18 factors compared between the two stocks.

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.

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.

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