Monsanto (NYSE: MON) and Arcadia Biosciences (NASDAQ:RKDA) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Dividends

Monsanto pays an annual dividend of $2.16 per share and has a dividend yield of 1.7%. Arcadia Biosciences does not pay a dividend. Monsanto pays out 39.3% of its earnings in the form of a dividend.

Risk & Volatility

Monsanto has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Arcadia Biosciences has a beta of -5.71, suggesting that its share price is 671% less volatile than the S&P 500.

Earnings and Valuation

This table compares Monsanto and Arcadia Biosciences’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Monsanto $14.64 billion 3.85 $2.26 billion $5.50 23.26
Arcadia Biosciences $4.03 million 5.19 -$15.70 million ($6.86) -1.23

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

Analyst Recommendations

This is a summary of recent recommendations for Monsanto and Arcadia Biosciences, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monsanto 1 10 2 0 2.08
Arcadia Biosciences 0 1 0 0 2.00

Monsanto currently has a consensus target price of $126.50, suggesting a potential downside of 1.13%. Arcadia Biosciences has a consensus target price of $20.00, suggesting a potential upside of 136.97%. Given Arcadia Biosciences’ higher probable upside, analysts clearly believe Arcadia Biosciences is more favorable than Monsanto.

Profitability

This table compares Monsanto and Arcadia Biosciences’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monsanto 17.07% 37.31% 11.49%
Arcadia Biosciences -686.10% -259.46% -82.98%

Insider & Institutional Ownership

75.0% of Monsanto shares are owned by institutional investors. Comparatively, 15.2% of Arcadia Biosciences shares are owned by institutional investors. 0.8% of Monsanto shares are owned by company insiders. Comparatively, 17.7% of Arcadia Biosciences shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Monsanto beats Arcadia Biosciences on 12 of the 16 factors compared between the two stocks.

About Monsanto

Monsanto Company, together with its subsidiaries, provides agricultural products for farmers worldwide. It operates in two segments, Seeds and Genomics, and Agricultural Productivity. The Seeds and Genomics segment produces row crop seeds, including corn, soybean, cotton, and canola seeds under the DEKALB, Asgrow, and Deltapine brands; and vegetable seeds, such as tomato, pepper, melon, cucumber, squash, beans, broccoli, onions, lettuce, and others under the Seminis and De Ruiter brands. It also develops biotechnology traits that assist farmers in controlling insects and weeds in corn, soybean, and cotton crops under the SmartStax, YieldGard, YieldGard VT Triple, VT Triple PRO, and VT Double PRO brands; Intacta RR2 PRO brand; Bollgard and Bollgard II brands; Roundup Ready and Roundup Ready 2 Yield brands; and Roundup Ready 2 Xtend and Bollgard II XtendFlex brands. In addition, this segment licenses a range of germplasm and trait technologies to large and small seed companies. The Agricultural Productivity segment manufactures and sells herbicides for nonselective agricultural and residential lawn and garden applications for weed control under the Roundup brand name; and herbicides for selective agricultural applications for weed control under the XtendiMax brand name. The company markets its products through distributors, independent retailers and dealers, agricultural cooperatives, plant raisers, and agents, as well as directly to farmers. It has strategic alliance with Pairwise Plants to advance agriculture research and development by using gene-editing technology. The company was formerly known as Monsanto Ag Company and changed its name to Monsanto Company in March 2000. Monsanto Company was founded in 2000 and is based in St. Louis, Missouri.

About Arcadia Biosciences

Arcadia Biosciences, Inc., an agricultural food ingredient company, develops and commercializes health and nutrition ingredient traits worldwide. The company offers a suite of agricultural productivity traits, including nitrogen use efficiency, water use efficiency and drought tolerance, salinity tolerance, and herbicide tolerance traits. It also provides nutritional oils comprising gamma linolenic acid safflower oil to manufacturers of dietary and nutritional supplements, medical foods, dog food, and other products under the SONOVA brand; and arachidonic acid safflower oil that is used as an ingredient in infant nutrition products. In addition, the company has various programs under development comprising fiber resistant starch wheat, whole grain flour, and reduced gluten wheat programs. Arcadia Biosciences, Inc. has strategic collaboration with Dow AgroSciences to develop and commercialize enhanced wheat quality trait. The company was founded in 2002 and is headquartered in Davis, California.

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