Covestro (OTCMKTS:COVTY – Get Free Report) and Scotts Miracle-Gro (NYSE:SMG – Get Free Report) are both materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.
Profitability
This table compares Covestro and Scotts Miracle-Gro’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Covestro | -6.97% | -13.22% | -6.31% |
| Scotts Miracle-Gro | 2.19% | -81.90% | 8.97% |
Analyst Recommendations
This is a breakdown of current recommendations for Covestro and Scotts Miracle-Gro, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Covestro | 0 | 1 | 0 | 0 | 2.00 |
| Scotts Miracle-Gro | 0 | 3 | 3 | 0 | 2.50 |
Dividends
Covestro pays an annual dividend of $1.31 per share and has a dividend yield of 3.9%. Scotts Miracle-Gro pays an annual dividend of $2.64 per share and has a dividend yield of 5.0%. Covestro pays out -51.8% 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.
Earnings & Valuation
This table compares Covestro and Scotts Miracle-Gro”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Covestro | $14.64 billion | 0.96 | -$728.62 million | ($2.53) | -13.42 |
| Scotts Miracle-Gro | $3.48 billion | 0.88 | $145.20 million | $1.15 | 45.97 |
Scotts Miracle-Gro has lower revenue, but higher earnings than Covestro. Covestro 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.
Risk & Volatility
Covestro has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Scotts Miracle-Gro has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500.
Institutional and Insider Ownership
74.1% of Scotts Miracle-Gro shares are held by institutional investors. 24.4% of Scotts Miracle-Gro shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Summary
Scotts Miracle-Gro beats Covestro on 12 of the 16 factors compared between the two stocks.
About Covestro
Covestro AG supplies high-tech polymer materials and application solutions. It operates in two segments, Performance Materials, and Solutions & Specialties. The Performance Materials segment develops, produces, and supplies high-performance materials, such as polyurethanes and polycarbonates, and base chemicals, which include diphenylmethane diisocyanate (MDI), toluylene diisocyanate, long-chain polyols, and polycarbonate resins for use in furniture and wood processing, construction, automotive, and transportation industries, as well as roof structures, insulation for buildings and refrigerators, mattresses, car seats, and other applications. The Solutions & Specialties segment comprises a range of polymer products, including polycarbonates, precursors for coatings and adhesives, MDI specialties and polyols, thermoplastic polyurethanes, specialty films, and elastomers that are used in automotive and transportation, electrical, electronics and household appliances, construction, and healthcare industries, as well as composite resins for solar panel frames, laptops, floodlights, and electric vehicle batteries. The company markets its products through trading houses and distributors. It operates in Europe, the Middle East, Africa, Latin America, the United States, Canada, and the People's Republic of China. The company was founded in 1863 and is headquartered in Leverkusen, Germany.
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.
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