American Vanguard (NYSE:AVD) and Scotts Miracle-Gro (NYSE:SMG) Critical Survey

Scotts Miracle-Gro (NYSE:SMG) and American Vanguard (NYSE:AVD) are both materials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Dividends

Scotts Miracle-Gro pays an annual dividend of $2.64 per share and has a dividend yield of 4.4%. American Vanguard pays an annual dividend of $0.03 per share and has a dividend yield of 2.6%. Scotts Miracle-Gro pays out 229.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Vanguard pays out -1.6% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Scotts Miracle-Gro and American Vanguard”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scotts Miracle-Gro	$3.48 billion	0.99	$145.20 million	$1.15	51.79
American Vanguard	$510.32 million	0.07	-$49.88 million	($1.90)	-0.60

Scotts Miracle-Gro has higher revenue and earnings than American Vanguard. American Vanguard is trading at a lower price-to-earnings ratio than Scotts Miracle-Gro, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Scotts Miracle-Gro and American Vanguard’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scotts Miracle-Gro	2.19%	-81.90%	8.97%
American Vanguard	-10.70%	-9.05%	-2.78%

Risk and Volatility

Scotts Miracle-Gro has a beta of 1.87, meaning that its share price is 87% more volatile than the S&P 500. Comparatively, American Vanguard has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.

Institutional and Insider Ownership

74.1% of Scotts Miracle-Gro shares are owned by institutional investors. Comparatively, 79.0% of American Vanguard shares are owned by institutional investors. 24.4% of Scotts Miracle-Gro shares are owned by company insiders. Comparatively, 5.6% of American Vanguard shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Scotts Miracle-Gro and American Vanguard, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scotts Miracle-Gro	0	2	4	0	2.67
American Vanguard	1	0	0	0	1.00

Scotts Miracle-Gro currently has a consensus price target of $70.20, suggesting a potential upside of 17.87%. Given Scotts Miracle-Gro’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Scotts Miracle-Gro is more favorable than American Vanguard.

Summary

Scotts Miracle-Gro beats American Vanguard on 13 of the 16 factors compared between the two stocks.

About Scotts Miracle-Gro

The Scotts Miracle-Gro Company, together with its subsidiaries, manufactures, markets, and sells products for lawn, garden care, and indoor and hydroponic gardening in the United States and internationally. It operates through three segments: U.S. Consumer, Hawthorne, and Other. The company provides lawn care products, comprising lawn fertilizers, grass seed products, spreaders, and other durable products, as well as lawn-related weed, pest, and disease control products; and gardening and landscape products, which include water-soluble and continuous-release plant foods, potting mixes, garden soils, mulches and ground cover products, plant-related pest and disease control products, organic garden products, and live goods and seeding solutions. It offers hydroponic products that help users to grow plants, flowers, and vegetables using little or no soil; lighting systems and components for use in hydroponic and indoor gardening applications; insect, rodent, and weed control products for home areas; and non-selective weed killer products. The company sells its products under the Scotts, Turf Builder, EZ Seed, PatchMaster, Thick'R Lawn, GrubEx, EdgeGuard, Handy Green II, Miracle-Gro, LiquaFeed, Shake N Feed, Hyponex, Earthgro, Nature Scapes, Ortho, Miracle-Gro Performance Organics, Miracle-Gro Organic Choice, Whitney Farms, EcoScraps, Mother Earth, Botanicare, General Hydroponics, Cyco, Gavita, Agrolux, HydroLogic Purification System, Gro Pro, AeroGarden, Titan, Tomcat, Ortho Weed B Gon, Roundup, Groundclear, and Alchemist brands. It serves home centers, mass merchandisers, warehouse clubs, large hardware chains, independent hardware stores, nurseries, garden centers, e-commerce platforms, and food and drug stores, as well as indoor gardening and hydroponic distributors, retailers, and growers. The Scotts Miracle-Gro Company was founded in 1868 and is headquartered in Marysville, Ohio.

About American Vanguard

American Vanguard Corporation, through its subsidiaries, develops, manufactures, and markets specialty chemicals for agricultural, commercial, and consumer uses in the United States and internationally. It manufactures and formulates chemicals, including insecticides, fungicides, herbicides, soil health, plant nutrition, molluscicides, growth regulators, soil fumigants, and biorationals in liquid, powder, and granular forms for crops, turf and ornamental plants, and human and animal health protection. The company also markets, sells, and distributes end-use chemical and biological products for crop applications; and distributes chemicals for turf and ornamental markets. It distributes its products through national distribution companies, and buying groups or co-operatives; and through sales offices, sales force executives, sales agents, and wholly owned distributors. American Vanguard Corporation was incorporated in 1969 and is headquartered in Newport Beach, California.