Contrasting Scotts Miracle-Gro (NYSE:SMG) & S&W Seed (NASDAQ:SANW)

Scotts Miracle-Gro (NYSE:SMG) and S&W Seed (NASDAQ:SANW) are both consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Volatility & Risk

Scotts Miracle-Gro has a beta of 1.98, indicating that its share price is 98% more volatile than the S&P 500. Comparatively, S&W Seed has a beta of 1.82, indicating that its share price is 82% more volatile than the S&P 500.

Profitability

This table compares Scotts Miracle-Gro and S&W Seed’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scotts Miracle-Gro	1.54%	-60.46%	6.35%
S&W Seed	-85.38%	-50.81%	-17.71%

Institutional & Insider Ownership

74.1% of Scotts Miracle-Gro shares are owned by institutional investors. Comparatively, 61.7% of S&W Seed shares are owned by institutional investors. 25.4% of Scotts Miracle-Gro shares are owned by insiders. Comparatively, 11.4% of S&W Seed shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Scotts Miracle-Gro and S&W Seed”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scotts Miracle-Gro	$3.55 billion	0.91	-$34.90 million	$0.76	73.38
S&W Seed	$54.99 million	0.01	-$30.03 million	($14.24)	-0.02

S&W Seed has lower revenue, but higher earnings than Scotts Miracle-Gro. S&W Seed 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.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Scotts Miracle-Gro and S&W Seed, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scotts Miracle-Gro	0	3	4	0	2.57
S&W Seed	0	0	1	0	3.00

Scotts Miracle-Gro presently has a consensus target price of $70.17, suggesting a potential upside of 25.81%. S&W Seed has a consensus target price of $25.00, suggesting a potential upside of 7,042.86%. Given S&W Seed’s stronger consensus rating and higher possible upside, analysts plainly believe S&W Seed is more favorable than Scotts Miracle-Gro.

Summary

Scotts Miracle-Gro beats S&W Seed on 10 of the 14 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 S&W Seed

S&W Seed Co. engages in the breeding, production, and sale of stevia and alfalfa seeds. The company was founded in 1980 and is headquartered in Longmont, CO.