Head to Head Review: Scotts Miracle-Gro (NYSE:SMG) versus Air Products and Chemicals (NYSE:APD)

Air Products and Chemicals (NYSE:APD) and Scotts Miracle-Gro (NYSE:SMG) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Insider & Institutional Ownership

81.7% of Air Products and Chemicals shares are held by institutional investors. Comparatively, 74.1% of Scotts Miracle-Gro shares are held by institutional investors. 1.9% of Air Products and Chemicals shares are held by insiders. Comparatively, 24.4% of Scotts Miracle-Gro shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Air Products and Chemicals has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Scotts Miracle-Gro has a beta of 1.83, meaning that its stock price is 83% more volatile than the S&P 500.

Earnings and Valuation

This table compares Air Products and Chemicals and Scotts Miracle-Gro”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Air Products and Chemicals	$12.04 billion	5.33	-$394.50 million	($0.22)	-1,310.72
Scotts Miracle-Gro	$3.41 billion	0.95	$145.20 million	$1.15	48.63

Scotts Miracle-Gro has lower revenue, but higher earnings than Air Products and Chemicals. Air Products and Chemicals 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 Ratings

This is a summary of recent recommendations and price targets for Air Products and Chemicals and Scotts Miracle-Gro, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Air Products and Chemicals	0	7	10	1	2.67
Scotts Miracle-Gro	0	4	3	0	2.43

Air Products and Chemicals currently has a consensus target price of $336.53, suggesting a potential upside of 16.71%. Scotts Miracle-Gro has a consensus target price of $75.40, suggesting a potential upside of 34.82%. Given Scotts Miracle-Gro’s higher probable upside, analysts plainly believe Scotts Miracle-Gro is more favorable than Air Products and Chemicals.

Profitability

This table compares Air Products and Chemicals and Scotts Miracle-Gro’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Air Products and Chemicals	-0.38%	16.87%	7.18%
Scotts Miracle-Gro	2.19%	-81.90%	8.97%

Dividends

Air Products and Chemicals pays an annual dividend of $7.24 per share and has a dividend yield of 2.5%. Scotts Miracle-Gro pays an annual dividend of $2.64 per share and has a dividend yield of 4.7%. Air Products and Chemicals pays out -3,290.9% of its earnings in the form of a dividend. 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. Air Products and Chemicals has increased its dividend for 43 consecutive years.

About Air Products and Chemicals

Air Products and Chemicals, Inc. provides atmospheric gases, process and specialty gases, equipment, and related services in the Americas, Asia, Europe, the Middle East, India, and internationally. The company produces atmospheric gases, including oxygen, nitrogen, and argon; process gases, such as hydrogen, helium, carbon dioxide, carbon monoxide, and syngas; and specialty gases for customers in various industries, including refining, chemical, manufacturing, electronics, energy production, medical, food, and metals. It also designs and manufactures equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and liquid helium and liquid hydrogen transport and storage. The company was founded in 1940 and is headquartered in Allentown, Pennsylvania.

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.