Critical Comparison: Darling Ingredients (NYSE:DAR) vs. Alico (NASDAQ:ALCO)

Alico (NASDAQ:ALCO) and Darling Ingredients (NYSE:DAR) are both consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Insider and Institutional Ownership

62.3% of Alico shares are held by institutional investors. Comparatively, 94.4% of Darling Ingredients shares are held by institutional investors. 6.7% of Alico shares are held by insiders. Comparatively, 1.9% of Darling Ingredients shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Alico and Darling Ingredients”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alico	$17.07 million	17.19	-$147.33 million	$0.22	179.82
Darling Ingredients	$6.14 billion	1.67	$62.80 million	$3.71	17.54

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

Profitability

This table compares Alico and Darling Ingredients’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alico	8.98%	-20.77%	-11.09%
Darling Ingredients	9.13%	12.98%	6.08%

Volatility and Risk

Alico has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, Darling Ingredients has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Alico and Darling Ingredients, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alico	0	1	1	1	3.00
Darling Ingredients	0	2	10	1	2.92

Alico presently has a consensus price target of $45.00, indicating a potential upside of 13.75%. Darling Ingredients has a consensus price target of $69.00, indicating a potential upside of 6.04%. Given Alico’s stronger consensus rating and higher possible upside, analysts plainly believe Alico is more favorable than Darling Ingredients.

Summary

Darling Ingredients beats Alico on 9 of the 14 factors compared between the two stocks.

About Alico

Alico, Inc., together with its subsidiaries, operates as an agribusiness and land management company in the United States. The company operates in two segments, Alico Citrus, and Land Management and Other Operations. The Alico Citrus segment engages in planting, owning, cultivating, and/or managing citrus groves to produce fruit for sale to fresh and processed citrus markets, including activities related to the purchase and resale of fruit and value-added services, which include contracting for the harvesting, marketing, and hauling of citrus. The Land Management and Other Operations segment is involved in the activities related to native plant sales, grazing and hunting leasing, management, and/or conservation of unimproved native pastureland; and activities related to rock mining royalties and other insignificant lines of business, as well as in the activities related to owning and/or leasing improved farmland. The company was incorporated in 1960 and is based in Fort Myers, Florida.

About Darling Ingredients

Darling Ingredients Inc. develops, produces, and sells natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America, and internationally. The company operates through three segments: Feed Ingredients, Food Ingredients, and Fuel Ingredients. It offers ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries. The company also collects and transforms various animal by-product streams into useable and specialty ingredients, such as collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstock, green energy, natural casings, and hides. In addition, it recovers and converts used cooking oil and animal fats, and residual bakery products into valuable feed and fuel ingredients. Further, the company provides environmental services, including grease trap collection and disposal services to food service establishments. It primarily operates under the Rendac, Sonac, FASA, Ecoson, Rousselot, Gelnex, and CTH brand names. The company was formerly known as Darling International Inc. and changed its name to Darling Ingredients Inc. in May 2014. Darling Ingredients Inc. was founded in 1882 and is headquartered in Irving, Texas.