Alto Ingredients vs Cross Timbers Royalty Trust
Alto Ingredients, Inc. and Cross Timbers Royalty Trust are presented on this page to allow a balanced comparison of their business models, financial performance, and market context. The content focuses on how each company creates value, operates within its sector, and the factors shaping its competitive position, without guidance or recommendations. Educational content, not financial advice.
Alto Ingredients, Inc. and Cross Timbers Royalty Trust are presented on this page to allow a balanced comparison of their business models, financial performance, and market context. The content focuse...
Investment Analysis
Alto Ingredients
ALTO
Pros
- Cross Timbers Royalty Trust holds significant net profits interests in producing oil and gas properties across Texas, Oklahoma, and New Mexico, ensuring diversified asset exposure.
- The trust offers a high dividend yield above 10%, providing a steady income stream supported by regular monthly distributions.
- It benefits from a low beta of 0.18, indicating lower volatility and reduced sensitivity to overall market fluctuations.
Considerations
- Revenue and net income declined sharply in 2024 by approximately 46% and 51% respectively, highlighting recent operational or market challenges.
- The trust's valuation metrics such as high price-to-book ratio (over 25x) indicate a potentially stretched valuation compared with industry peers.
- Earnings are heavily dependent on commodity prices and production volumes, exposing the trust to commodity price volatility and operational risks.
Pros
- Alto Ingredients has a broad product portfolio including specialty alcohols and renewable fuels serving diverse healthcare, beauty, and food markets.
- The company exhibits a strong quick ratio above 1.5 and current ratio near 2.7, indicating reasonable short-term liquidity and financial flexibility.
- Recent analyst coverage rates Alto Ingredients as a strong buy with an optimistic 12-month price target reflecting potential upside.
Considerations
- The company reported a significant net loss of about $68 million in the trailing twelve months, demonstrating current profitability challenges.
- Its stock shows high volatility with a beta of around 0.68 and a wide 52-week price range from $0.76 to $2.05.
- Alto Ingredients operates in commodity-sensitive segments such as renewable fuel and grain neutral spirits, exposing it to raw material price and regulatory risks.
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