Monsanto (NYSE: MON) and Scotts Miracle-Gro Company (The) (NYSE:SMG) are both mid-cap basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitabiliy.

Profitability

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

Net Margins Return on Equity Return on Assets
Monsanto 14.11% 45.26% 11.37%
Scotts Miracle-Gro Company (The) 7.85% 36.28% 7.67%

Valuation & Earnings

This table compares Monsanto and Scotts Miracle-Gro Company (The)’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Monsanto $14.52 billion 3.55 $4.19 billion $4.62 25.38
Scotts Miracle-Gro Company (The) $2.93 billion 1.94 $529.90 million $3.81 25.24

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

Institutional & Insider Ownership

75.3% of Monsanto shares are held by institutional investors. Comparatively, 68.0% of Scotts Miracle-Gro Company (The) shares are held by institutional investors. 0.8% of Monsanto shares are held by insiders. Comparatively, 28.2% of Scotts Miracle-Gro Company (The) shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Monsanto has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Scotts Miracle-Gro Company (The) has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Dividends

Monsanto pays an annual dividend of $2.16 per share and has a dividend yield of 1.8%. Scotts Miracle-Gro Company (The) pays an annual dividend of $2.00 per share and has a dividend yield of 2.1%. Monsanto pays out 46.8% of its earnings in the form of a dividend. Scotts Miracle-Gro Company (The) pays out 52.5% 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. Monsanto has increased its dividend for 7 consecutive years and Scotts Miracle-Gro Company (The) has increased its dividend for 7 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations for Monsanto and Scotts Miracle-Gro Company (The), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monsanto 0 7 8 0 2.53
Scotts Miracle-Gro Company (The) 0 1 3 0 2.75

Monsanto presently has a consensus target price of $123.62, indicating a potential upside of 5.42%. Scotts Miracle-Gro Company (The) has a consensus target price of $100.00, indicating a potential upside of 3.97%. Given Monsanto’s higher possible upside, equities analysts plainly believe Monsanto is more favorable than Scotts Miracle-Gro Company (The).

Summary

Monsanto beats Scotts Miracle-Gro Company (The) on 12 of the 16 factors compared between the two stocks.

Monsanto Company Profile

Monsanto Company (Monsanto), along with its subsidiaries, is a provider of agricultural products for farmers. The Company provides seeds, biotechnology trait products, herbicides and digital agriculture tools to farmers. The Company operates through two segments: Seeds and Genomics, and Agricultural Productivity. Through its Seeds and Genomics segment, the Company produces seed brands, including DEKALB, Asgrow, Deltapine, Seminis and De Ruiter, and it develops biotechnology traits that assist farmers in controlling insects and weeds and digital agriculture to assist farmers in decision-making. The Seeds and Genomics segment offers products, such as Germplasm and Biotechnology traits. Through its Agricultural Productivity segment, the Company manufactures Roundup brand herbicides and other herbicides and provides lawn-and-garden herbicide products for the residential market.

Scotts Miracle-Gro Company (The) Company Profile

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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