This avocado (plus other foods) grower is due to report earnings on June 8. EPS estimates are $0.66 on revenues of $306.17 million. Analysts expect the company to grow at a 14.3% annual rate over the next five years.
Calavo Growers, Inc. (CVGW)
From Sure Dividend
Calavo Growers operates in the farm products industry. It was founded in 1924. Today, it markets and distributes avocados and other foods. The Fresh Products segment sizes, packs, and ripens avocados for delivery to its customers. The Calavo Foods segment procures and processes avocados into guacamole, and distributes it to customers. Lastly, its Renaissance Food Group produces and distributes a variety of healthy fresh packaged food products, such as tomatoes and papayas, through retail channels.
Calavo Growers earns a place on this list because of its growth story. Avocados are a “super food”, and are growing in popularity due to their high nutrition. As such, they have great appeal to health-conscious consumers. This is an emerging trend in the United States; consumers are becoming much more aware of what they are eating. Healthier foods like avocados are seeing strong demand as a result. According to Calavo, consumption of avocados in the United States has risen at an 8% annual rate over the past 10 years.
This undeniable trend is evident in Calavo’s huge growth over the past decade. In fact, from 2009 to 2019, Calavo’s sales grew nearly 250%. Adjusted diluted earnings-per-share tripled over the same time.
In the most recent quarter, Calavo reported a 15% increase in fresh avocado unit volume over the same period last year. Revenue increased 5.8% to a record $273 million. Adjusted earnings-per-share came to $0.07 per share for the quarter. For the full year, Calavo management expects double-digit growth in adjusted earnings-per-share.
Household penetration of avocados is still below other common fruits, which means Calavo has a long runway of future growth up ahead. Calavo is an industry leader, with durable competitive advantages. It has more than 15 production and distribution facilities throughout the United States, giving the company the opportunity for continued growth in the years ahead.
Calavo pays an annual dividend. The 2019 dividend payout of $1.10 per share was a 10% increase from 2018. If Calavo continues to generate high levels of growth, it is conceivable shareholders could be in line for another strong dividend hike later in 2020.
Ben Reynolds and Bob Ciura, Sure Dividend Newsletter, suredividend.com, support@suredividend.com, 800-531-0465, May 22, 2020