Comparing GrowGeneration (NASDAQ:GRWG) & Valvoline (NYSE:VVV)

Valvoline (NYSE:VVV) and GrowGeneration (NASDAQ:GRWG) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, dividends, profitability, risk and valuation.

Risk and Volatility

Valvoline has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, GrowGeneration has a beta of 2.56, suggesting that its stock price is 156% more volatile than the S&P 500.

Profitability

This table compares Valvoline and GrowGeneration’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valvoline	5.17%	65.12%	7.11%
GrowGeneration	-10.07%	-17.44%	-11.52%

Valuation & Earnings

This table compares Valvoline and GrowGeneration”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valvoline	$1.71 billion	2.02	$210.70 million	$0.80	33.88
GrowGeneration	$161.74 million	0.55	-$24.05 million	($0.27)	-5.59

Valvoline has higher revenue and earnings than GrowGeneration. GrowGeneration is trading at a lower price-to-earnings ratio than Valvoline, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

96.1% of Valvoline shares are held by institutional investors. Comparatively, 36.0% of GrowGeneration shares are held by institutional investors. 0.7% of Valvoline shares are held by insiders. Comparatively, 8.1% of GrowGeneration shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and price targets for Valvoline and GrowGeneration, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valvoline	0	5	12	0	2.71
GrowGeneration	1	1	1	0	2.00

Valvoline currently has a consensus target price of $43.06, indicating a potential upside of 58.87%. GrowGeneration has a consensus target price of $2.50, indicating a potential upside of 65.56%. Given GrowGeneration’s higher possible upside, analysts clearly believe GrowGeneration is more favorable than Valvoline.

Summary

Valvoline beats GrowGeneration on 11 of the 14 factors compared between the two stocks.

About Valvoline

Valvoline Inc. engages in the operation and franchising of vehicle service centers and retail stores in the United States and Canada. The company, through its service centers, provides fluid exchange for motor oil, transmission and differential fluid, and coolant; parts replacement for batteries, filters, wiper blades, and belts; and safety services, such as tire inflation and rotation, bulbs, and safety checks. It offers its services for passenger cars, hybrid and battery electric vehicles, and light and medium duty vehicles. The company was founded in 1866 and is headquartered in Lexington, Kentucky.

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.