2 Avocado Stocks Proving the Superfood Can Be a Super Investment

Core Insights - The avocado market continues to thrive, with the U.S. importing a record 2.8 billion pounds from Mexico in the previous year, highlighting the fruit's growing popularity and investment potential [1] Company Overview: Calavo Growers - Calavo Growers Inc. is a leading player in the fresh produce industry, specializing in avocados and other products like tomatoes and Hawaiian papayas [2] - The company operates as an asset-light business, partnering with farmers for sourcing while maintaining packing facilities in Mexico [3] Financial Performance: Calavo Growers - For fiscal Q3 2024, Calavo reported an EPS of 57 cents, exceeding analyst expectations by 14 cents, with revenues increasing 11.7% YoY to $179.6 million [4] - The Grown segment saw a 13.3$163.2 million, driven by strong avocado margins despite supply disruptions [4] Dividend Strategy: Calavo Growers - The Board of Directors has doubled the cash dividend to 20 cents per share, with the next payment scheduled for October 30, 2024 [5] - The company plans to reinvest proceeds from the sale of its Fresh Cut segment into its core avocado and guacamole businesses [5] Company Overview: Mission Produce - Mission Produce Inc. was initially focused solely on avocados but has since diversified into mangos and blueberries, optimizing production across different seasons [7][8] - The company operates a vertically integrated model, owning farms in multiple countries and managing its own distribution network [9] Financial Performance: Mission Produce - Mission Produce reported fiscal Q3 2024 EPS of 23 cents, surpassing expectations by 20 cents, with revenues rising 24% YoY to $324 million [10] - Adjusted EBITDA increased by 49$31.5 million, with international farming revenues at $27.4 million [10] Market Outlook: Mission Produce - The company anticipates flat to slightly lower industry volumes for the remainder of fiscal 2024, transitioning to a Mexico-centric sourcing model [12] - Pricing is expected to decrease sequentially but remain 15% higher YoY, with blueberry harvest season beginning in fiscal Q4 [12]