GrowGeneration (NASDAQ:GRWG – Get Free Report) and Hydrofarm Holdings Group (NASDAQ:HYFM – Get Free Report) are both small-cap basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.
Insider & Institutional Ownership
36.0% of GrowGeneration shares are held by institutional investors. Comparatively, 26.6% of Hydrofarm Holdings Group shares are held by institutional investors. 7.6% of GrowGeneration shares are held by insiders. Comparatively, 6.9% of Hydrofarm Holdings Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares GrowGeneration and Hydrofarm Holdings Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| GrowGeneration | -28.33% | -32.51% | -22.75% |
| Hydrofarm Holdings Group | -38.77% | -24.85% | -13.26% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| GrowGeneration | 0 | 3 | 1 | 0 | 2.25 |
| Hydrofarm Holdings Group | 0 | 2 | 0 | 0 | 2.00 |
GrowGeneration presently has a consensus price target of $2.38, indicating a potential upside of 129.47%. Hydrofarm Holdings Group has a consensus price target of $7.00, indicating a potential upside of 77.66%. Given GrowGeneration’s stronger consensus rating and higher possible upside, analysts clearly believe GrowGeneration is more favorable than Hydrofarm Holdings Group.
Volatility and Risk
GrowGeneration has a beta of 3.32, indicating that its share price is 232% more volatile than the S&P 500. Comparatively, Hydrofarm Holdings Group has a beta of 2.38, indicating that its share price is 138% more volatile than the S&P 500.
Valuation & Earnings
This table compares GrowGeneration and Hydrofarm Holdings Group”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| GrowGeneration | $188.87 million | 0.33 | -$49.51 million | ($0.84) | -1.23 |
| Hydrofarm Holdings Group | $190.29 million | 0.10 | -$66.72 million | ($14.92) | -0.26 |
GrowGeneration has higher earnings, but lower revenue than Hydrofarm Holdings Group. GrowGeneration is trading at a lower price-to-earnings ratio than Hydrofarm Holdings Group, indicating that it is currently the more affordable of the two stocks.
Summary
GrowGeneration beats Hydrofarm Holdings Group on 10 of the 14 factors compared between the two stocks.
About GrowGeneration
GrowGeneration Corp., through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. The company engages in the marketing and distribution of nutrients, additives, growing media, lighting, and environmental control systems, as well as other indoor and outdoor growing products. It operates a chain of stores in California, Colorado, Michigan, Maine, Oklahoma, Oregon, Washington, Montana, New York, Ohio, Mississippi, Missouri, Arizona, Rhode Island, Florida, Massachusetts, Virginia, New Jersey, and New Mexico, as well as growgeneration.com, an online superstore for cultivators, a wholesale business for resellers, HRG Distribution, and benching, racking, and storage solutions and MMI. The company was formerly known as Easylife Corp. GrowGeneration Corp. was founded in 2008 and is based in Greenwood Village, Colorado.
About Hydrofarm Holdings Group
Hydrofarm Holdings Group, Inc., together with its subsidiaries, manufactures and distributes controlled environment agriculture (CEA) equipment and supplies in the United States and Canada. The company provides agricultural lighting devices, indoor climate control equipment, and nutrients, as well as plant additives used to grow, farm, and cultivate cannabis, flowers, fruits, plants, vegetables, grains, and herbs in controlled environment. It is also involved in the distribution of CEA equipment and supplies comprising nutrients and fertilizers; grow light systems; horticulture benches and racking systems; heating, ventilation, and air conditioning systems; humidity and carbon dioxide monitors and controllers; water pumps, heaters, chillers, and filters; and various growing media typically made from soil, peat, rock wool or coconut fiber, and others. The company offers its products to specialty hydroponic retailers, commercial resellers and greenhouse builders, garden centers, hardware stores, and e-commerce retailers under the Active Air, Active Aqua, Aurora Peat Products, HEAVY 16, House & Garden, Gaia Green, Grotek, Innovative Growers Equipment, Mad Farmer, Phantom, PHOTOBIO, Procision, Roots Organics, Soul, and SunBlaster brands. It serves its products through a range of commercial and home gardening equipment and supplies retailers. Hydrofarm Holdings Group, Inc. was founded in 1977 and is based in Shoemakersville, Pennsylvania.
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