Financial Review: LyondellBasell Industries (NYSE:LYB) & Scotts Miracle-Gro (NYSE:SMG)

LyondellBasell Industries (NYSE:LYB) and Scotts Miracle-Gro (NYSE:SMG) are both materials companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.

Earnings and Valuation

This table compares LyondellBasell Industries and Scotts Miracle-Gro”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LyondellBasell Industries	$30.15 billion	0.67	-$738.00 million	($1.13)	-55.47
Scotts Miracle-Gro	$3.41 billion	0.92	$145.20 million	$1.15	47.12

Scotts Miracle-Gro has lower revenue, but higher earnings than LyondellBasell Industries. LyondellBasell Industries 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 ratings and recommmendations for LyondellBasell Industries and Scotts Miracle-Gro, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LyondellBasell Industries	4	10	6	1	2.19
Scotts Miracle-Gro	0	2	4	0	2.67

LyondellBasell Industries currently has a consensus target price of $71.50, suggesting a potential upside of 14.06%. Scotts Miracle-Gro has a consensus target price of $70.20, suggesting a potential upside of 29.54%. Given Scotts Miracle-Gro’s stronger consensus rating and higher possible upside, analysts clearly believe Scotts Miracle-Gro is more favorable than LyondellBasell Industries.

Institutional & Insider Ownership

71.2% of LyondellBasell Industries shares are owned by institutional investors. Comparatively, 74.1% of Scotts Miracle-Gro shares are owned by institutional investors. 0.1% of LyondellBasell Industries shares are owned by company insiders. Comparatively, 24.4% of Scotts Miracle-Gro shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares LyondellBasell Industries and Scotts Miracle-Gro’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LyondellBasell Industries	-1.13%	17.44%	5.30%
Scotts Miracle-Gro	2.19%	-81.90%	8.97%

Dividends

LyondellBasell Industries pays an annual dividend of $2.76 per share and has a dividend yield of 4.4%. Scotts Miracle-Gro pays an annual dividend of $2.64 per share and has a dividend yield of 4.9%. LyondellBasell Industries pays out -244.2% 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. LyondellBasell Industries has raised its dividend for 14 consecutive years.

Volatility and Risk

LyondellBasell Industries has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, Scotts Miracle-Gro has a beta of 1.87, suggesting that its stock price is 87% more volatile than the S&P 500.

Summary

Scotts Miracle-Gro beats LyondellBasell Industries on 12 of the 18 factors compared between the two stocks.

About LyondellBasell Industries

LyondellBasell Industries N.V. operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. The company operates in six segments: Olefins and PolyolefinsAmericas; Olefins and PolyolefinsEurope, Asia, International; Intermediates and Derivatives; Advanced Polymer Solutions; Refining; and Technology. It produces and markets olefins and co-products, polyethylene, and polypropylene; and propylene oxide and derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol. In addition, the company produce and markets compounding and solutions including polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers including catalloy and polybutene-1; and refines heavy, high-sulfur crude oil and other crude oils, as well as refined products, including gasoline and distillates. Further, it develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications. LyondellBasell Industries N.V. was incorporated in 2009 and is headquartered in Houston, Texas.

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.