Critical Review: Pigeon (OTCMKTS:PGENY) versus Alto Ingredients (NASDAQ:ALTO)

Pigeon (OTCMKTS:PGENY) and Alto Ingredients (NASDAQ:ALTO) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Volatility & Risk

Pigeon has a beta of 0.12, meaning that its stock price is 88% less volatile than the S&P 500. Comparatively, Alto Ingredients has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Pigeon and Alto Ingredients, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pigeon	0	0	0	0	0.00
Alto Ingredients	0	0	1	0	3.00

Alto Ingredients has a consensus price target of $5.50, suggesting a potential upside of 444.55%. Given Alto Ingredients’ stronger consensus rating and higher probable upside, analysts plainly believe Alto Ingredients is more favorable than Pigeon.

Insider and Institutional Ownership

42.4% of Alto Ingredients shares are held by institutional investors. 5.3% of Alto Ingredients shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Pigeon and Alto Ingredients”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pigeon	$688.99 million	1.98	$55.26 million	$0.13	21.92
Alto Ingredients	$965.26 million	0.08	-$58.98 million	($0.92)	-1.10

Pigeon has higher earnings, but lower revenue than Alto Ingredients. Alto Ingredients is trading at a lower price-to-earnings ratio than Pigeon, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Pigeon and Alto Ingredients’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pigeon	8.82%	12.07%	9.43%
Alto Ingredients	-7.16%	-18.25%	-10.51%

About Pigeon

Pigeon Corporation, together with its subsidiaries, engages in the manufacture, sale, import, and export of baby and child-care products, maternity items, women’s care products, home healthcare products, and nursing care products in Japan and internationally. The company operates in four segments: Japan Business, China Business, Singapore Business, and Lansinoh Business. The company is involved in the provision of baby and mother care products, such as nursing bottles and nipples, toiletries, breast pads, breast pumps, nipple care products, breast milk storage bags, and breastfeeding-related products under Pigeon and Lansinoh brands. It also offers non-woven products, baby strollers, aging-prevention products, wet wipes, skincare products, cleaning and disinfecting products, and elder care products and services. In addition, the company provides child-minding and daycare services, in-home nursing care support services, outpatient care facility services, operation of in-company childcare facilities, daycare services, event childcare services, babysitter dispatch services, preschool education services, and at-home elder care services. The company was formerly known as Pigeon Honyuki Honpo Corporation and changed its name to Pigeon Corporation in 1966. Pigeon Corporation was founded in 1949 and is headquartered in Tokyo, Japan.

About Alto Ingredients

Alto Ingredients, Inc. produces, distributes, and markets specialty alcohols, renewable fuel, and essential ingredients in the United States. The company operates in three segments: Marketing and Distribution, Pekin Campus Production, and Western Production. It offers specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants, and cleaners for health, home, and beauty markets; grain neutral spirits used in alcoholic beverages and vinegar, as well as corn germ used in corn oils in the food and beverage markets; alcohols and other products for paint applications and fertilizers in the industrial and agriculture markets; and essential ingredients include dried yeast, corn protein meal, corn protein feed, distiller's grains, and liquid feed for commercial animal feed and pet food applications, as well as yeast for human consumption. The company also provides fuel-grade ethanol used as transportation fuel and distillers corn oil used as a biodiesel feedstock, as well as fuel-grade ethanol produced by third parties. In addition, it offers transportation, storage, and delivery services through third-party service providers. The company sells ethanol to integrated oil companies and gasoline marketers; essential ingredient feed products to dairies and feedlots; and corn oil to poultry, renewable diesel, and biodiesel customers. It operates alcohol production facilities. The company was formerly known as Pacific Ethanol, Inc. and changed its name to Alto Ingredients, Inc. in January 2021. Alto Ingredients, Inc. was founded in 2003 and is headquartered in Pekin, Illinois.