Calavo Growers packages, and distributes avocados and other fruits, as well as their fresh prepared food to restaurants, stores, and individual customers worldwide. While the company is based in Santa Paula, California, avocado production is cultivated throughout the state of California, as well as Central and South America. Calavo Growers was established in 1924 as an agricultural cooperative and was instrumental in launching the California avocado industry. The company operates its business through three divisions including Fresh Products, Calavo Foods and Renaissance Food Group.
Calavo Growers, Inc. markets, and distributes avocados, prepared avocados, and other perishable foods to food distributors, produce wholesalers, supermarkets, convenience stores, and restaurants worldwide. It operates in three segments: Fresh Products, Calavo Foods, and RFG. The Fresh products segment distributes avocados and other fresh produce products; and procures avocados grown in Mexico, as well as various other commodities, including tomatoes, papayas, and pineapples. The Calavo Foods segment is involved in purchasing, manufacturing, and distributing prepared products, including guacamole, tortilla chips, and salsa. The RFG segment produces, markets, and distributes fresh-cut fruits, ready-to-eat vegetables, recipe-ready vegetables, and deli products. The company offers its products primarily under the Calavo and RFG brands, and related logos; and Avo Fresco, Bueno, Calavo Gold, Calavo Salsa Lisa, Salsa Lisa, Celebrate the Taste, El Dorado, Fresh Ripe, Select, Taste of Paradise, The First Name in Avocados, Tico, Mfresh, Maui Fresh International, Triggered Avocados, ProRipeVIP, Garden Highway Fresh Cut, Garden Highway, and Garden Highway Chef Essentials trademarks. Calavo Growers, Inc. was founded in 1924 and is headquartered in Santa Paula, California.
(Summary) (Company) (Chart)
Calavo Growers Inc. (CVGW) declared a $0.90/share annual dividend, a 12.5% increase from its prior dividend of $0.80. The forward yield is currently 1.35% and is payable on Dec. 8 for shareholders of record Nov. 17. The stock goes ex-dividend on Nov. 15.
| 27 September 2016 Price $67.01 1yr Target $72.00 Analysts 5 Dividend $0.90 Payout Ratio 46.63% 1yr Cap Gain 7.44% Yield 1.34% 1yr Tot Return 8.78% P/E 34.79 PEG 4.97 Beta 0.53 | EPS (ttm) $1.93 EPS next yr $2.32 Forward P/E 28.93 EPS next 5yr 7.00% 1yr Price Support $16.24 Market Cap $1.17 Bil Revenues $896.00 Mil Earnings $33.60 Mil Profit Margin 3.75% Quick Ratio 1.00 Current Ratio 1.40 Debt/Equity 0.09 | 1yr RevGR 9.49% 3yr RevGR 15.67% 5yr RevGR 16.55% 1yr EarnGR 15,700.00% 3yr EarnGR 14.19% 5yr EarnGR 5.17% 1yr DivGR 12.50% 3yr DivGR 8.64% 5yr DivGR 10.35% ROA 11.00% ROE 16.90% |
Background.
Due to the overwhelming interest in the avocado, many California growers planted avocado seeds that had originated in Mexico. Although slow to mature, by 1923 those avocado trees were producing a large enough crop of avocados that needed to be marketed. The problem was the lack of a marketing outlet. As a result, on January 21, 1924, Calavo Growers, Inc. was founded as the California Avocado Growers' Exchange.
The founders studied grower cooperatives that were doing well at the time, such as the California Fruit Growers Exchange, and adopted those features that would work best for the avocado industry. In the first year, the California Avocado Growers Exchange packed the 18,000 lbs. of fruit that launched the California avocado industry. Shortly after, the growers exchange adopted the name Calavo as a brand. This was the result of a naming contest in which multiple entries were submitted combining the words "California" and "avocado". Calavo quickly became the brand name of high quality avocados.
In the early 1930s, the cooperative increased its offerings to include limes, coconuts, kiwis, mangos and persimmons. Papayas were added in the late 1940s.
The California Avocado Advisory board was created in 1961, Calavo played a key role in its creation and development. The purpose was to market the California avocado industry as a whole and not just the avocado growers in the cooperative. Today it is known as the California Avocado Commission.
After 78 years as a growers cooperative, Calavo members voted to take the company public. In 2002, Calavo Growers Inc. was designated the ticker symbol CVGW on the NASDAQ National Market System. The seats on the company's board of directors were filled mainly with longtime avocado growers, and that remains so today.
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My Perspective
Reader's of these articles already know that I like to own shares of companies in the farming and food business so it would be natural for me to like Calavo Growers, Inc. And I do. In fact, I'm already a shareholder of this company. I also have my shares set up so that the dividends paid are reinvested into additional shares of this company. Dividend reinvesting is one of the well kept secrets of successful investors and it's a strategy I employ on quite a few of my investments.
So my intention is to continue to accumulate additional shares of Calavo Growers through a dividend reinvestment program. But based on the technical chart above, as well as the fundamentals laid out above, I don't intend to add to my position through open market purchases at these current prices. I would rather wait and obtain shares at prices closer to $60 per share which would increase my dividend yield to nearly 1.5% and increase the one year estimated return on the price of the shares to nearly 20%.
Those are the number I can get excited about.
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