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

Insider & Institutional Ownership

76.9% of American Vanguard Corporation shares are owned by institutional investors. Comparatively, 69.0% of Scotts Miracle-Gro Company (The) shares are owned by institutional investors. 4.7% of American Vanguard Corporation shares are owned by insiders. Comparatively, 28.2% of Scotts Miracle-Gro Company (The) 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.

Dividends

American Vanguard Corporation pays an annual dividend of $0.06 per share and has a dividend yield of 0.3%. Scotts Miracle-Gro Company (The) pays an annual dividend of $2.12 per share and has a dividend yield of 2.2%. American Vanguard Corporation pays out 12.0% of its earnings in the form of a dividend. Scotts Miracle-Gro Company (The) pays out 55.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Scotts Miracle-Gro Company (The) has increased its dividend for 7 consecutive years. Scotts Miracle-Gro Company (The) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for American Vanguard Corporation and Scotts Miracle-Gro Company (The), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Vanguard Corporation 0 1 1 1 3.00
Scotts Miracle-Gro Company (The) 0 2 2 0 2.50

American Vanguard Corporation presently has a consensus target price of $19.50, suggesting a potential downside of 8.67%. Scotts Miracle-Gro Company (The) has a consensus target price of $100.00, suggesting a potential upside of 3.18%. Given Scotts Miracle-Gro Company (The)’s higher probable upside, analysts plainly believe Scotts Miracle-Gro Company (The) is more favorable than American Vanguard Corporation.

Volatility & Risk

American Vanguard Corporation has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500. Comparatively, Scotts Miracle-Gro Company (The) has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
American Vanguard Corporation 4.56% 5.10% 3.34%
Scotts Miracle-Gro Company (The) 7.85% 36.28% 7.67%

Earnings and Valuation

This table compares American Vanguard Corporation and Scotts Miracle-Gro Company (The)’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Vanguard Corporation $318.49 million 2.00 $44.28 million $0.50 42.70
Scotts Miracle-Gro Company (The) $2.93 billion 1.93 $517.80 million $3.81 25.44

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

Summary

Scotts Miracle-Gro Company (The) beats American Vanguard Corporation on 11 of the 18 factors compared between the two stocks.

About American Vanguard Corporation

American Vanguard Corporation operates as a holding company. The Company conducts its business through its subsidiaries, AMVAC Chemical Corporation (AMVAC), GemChem, Inc. (GemChem), 2110 Davie Corporation (DAVIE), Quimica Amvac de Mexico S.A. de C.V. (AMVAC M), AMVAC Mexico Sociedad de Responsabilidad Limitada (AMVAC M Srl), AMVAC de Costa Rica Sociedad de Responsabilidad Limitada (AMVAC CR Srl), AMVAC Switzerland GmbH (AMVAC S), AMVAC do Brasil Representacoes Ltda (AMVAC B), AMVAC C.V. (AMVAC CV), AMVAC Netherlands BV (AMVAC BV), Envance Technologies, LLC (Envance), AMVAC Singapore Pte, Ltd (AMVAC Sgpr) and Huifeng AMVAC Innovation Co. Limited (Hong Kong JV). AMVAC is a specialty chemical manufacturer that develops and markets products for agricultural, commercial and consumer uses. It manufactures and formulates chemicals, such as insecticides, fungicides, herbicides, molluscicides and soil fumigants for crops, turf and ornamental plants, and human and animal health protection.

About Scotts Miracle-Gro Company (The)

The Scotts Miracle-Gro Company (Scotts Miracle-Gro) is a manufacturer and marketer of branded consumer lawn and garden products. The Company’s segments include Global Consumer. In North America, its brands include Scotts and Turf Builder lawn and grass seed products; Miracle-Gro, Nature’s Care, Scotts, LiquaFeed and Osmocote gardening and landscape products; and Ortho, Roundup, Home Defense and Tomcat branded insect control, weed control and rodent control products. In the United Kingdom, its brands include Miracle-Gro plant fertilizers; Roundup, Weedol and Pathclear herbicides; EverGreen lawn fertilizers, and Levington gardening and landscape products.

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