Operating Margin - Fresh Del Monte Produce Inc (NYSE:FDP)

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Price: 38.76 USD 1.23%

Market Cap: 1.9B USD

3.8%

Current

Average

5.6%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

3.8%

Operating Profit

162m

Revenue

4.3B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
US		Fresh Del Monte Produce Inc NYSE:FDP	1.8B USD	4%
US	A	Archer-Daniels-Midland Co XETRA:ADM	24.1B EUR	2%
US		Bunge Ltd NYSE:BG	18B USD	3%
SG		Wilmar International Ltd SGX:F34	19B SGD	3%
CN		Tongwei Co Ltd SSE:600438	93.5B CNY	-9%
MY	S	Sime Darby Plantation Bhd KLSE:SIMEPLT	38B MYR	10%
US		Ingredion Inc NYSE:INGR	7.1B USD	15%
MY		IOI Corporation Bhd KLSE:IOICORP	25.4B MYR	12%
CN		New Hope Liuhe Co Ltd SZSE:000876	41.3B CNY	3%
US		Darling Ingredients Inc NYSE:DAR	5.5B USD	6%
MY	K	Kuala Lumpur Kepong Bhd KLSE:KLK	21.9B MYR	8%

Fresh Del Monte Produce Inc
Glance View

Economic Moat

None

Market Cap

1.9B USD

Industry

Food Products

Fresh Del Monte Produce Inc. is a key player in the global produce market, navigating the complexities of international trade with agility and precision. It was once part of the famous canned goods company, and today, it is a distinct entity renowned for delivering high-quality fresh fruit and vegetables worldwide. At the heart of its operations lies its vast network of farms and packing facilities spread across Latin America, Africa, and the Philippines, where the journey from seed to shelf begins. This global footprint allows the company to maintain a steady supply of produce, regardless of local climatic challenges. Del Monte's portfolio is brimming with a variety of offerings, with bananas and pineapples as its flagship products, supported by a rich mix of melons, avocados, fresh-cut fruits, and vegetables. To remain at the forefront of the industry, Fresh Del Monte harnesses sophisticated supply chain management techniques, ensuring that its products reach markets fresh and timely. This, in turn, fuels the company's financial engine, allowing it to thrive. Revenue is generated through retail, wholesale, and food service sectors, where the company's focus is not only on consistent quality but also on brand recognition. By leveraging an integrated logistics infrastructure, from maritime shipping capabilities to inland distribution networks, Del Monte ensures minimal delays, effectively optimizing its revenue streams. The company also diversifies through value-added products, including ready-to-eat and packaged fruit options, capitalizing on changing consumer preferences towards convenience. This diversification helps buffer the company against market volatility, reinforcing its position as a staple supplier in the global food industry.

View FDP Analysis

FDP Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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Fresh Del Monte Produce Inc
NYSE:FDP