The Scotts Miracle-Gro (NYSE:SMG) and The Mosaic (NYSE:MOS) are both large-cap basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.
Dividends
The Scotts Miracle-Gro pays an annual dividend of $2.48 per share and has a dividend yield of 1.1%. The Mosaic pays an annual dividend of $0.20 per share and has a dividend yield of 0.7%. The Scotts Miracle-Gro pays out 34.3% of its earnings in the form of a dividend. The Mosaic pays out 105.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The Scotts Miracle-Gro has increased its dividend for 10 consecutive years. The Scotts Miracle-Gro is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
The Scotts Miracle-Gro has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, The Mosaic has a beta of 1.81, suggesting that its stock price is 81% more volatile than the S&P 500.
Profitability
This table compares The Scotts Miracle-Gro and The Mosaic's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| The Scotts Miracle-Gro | 9.38% | 52.60% | 11.09% |
| The Mosaic | -13.05% | N/A | N/A |
Valuation and Earnings
This table compares The Scotts Miracle-Gro and The Mosaic's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| The Scotts Miracle-Gro | $4.13 billion | 3.14 | $387.40 million | $7.24 | 32.17 |
| The Mosaic | $8.91 billion | 1.20 | $-1,067,400,000.00 | $0.19 | 148.74 |
The Scotts Miracle-Gro has higher earnings, but lower revenue than The Mosaic. The Scotts Miracle-Gro is trading at a lower price-to-earnings ratio than The Mosaic, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
63.1% of The Scotts Miracle-Gro shares are held by institutional investors. Comparatively, 69.8% of The Mosaic shares are held by institutional investors. 27.2% of The Scotts Miracle-Gro shares are held by company insiders. Comparatively, 0.5% of The Mosaic shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of current ratings and recommmendations for The Scotts Miracle-Gro and The Mosaic, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| The Scotts Miracle-Gro | 0 | 1 | 4 | 0 | 2.80 |
| The Mosaic | 1 | 10 | 11 | 0 | 2.45 |
The Scotts Miracle-Gro currently has a consensus price target of $203.80, indicating a potential downside of 11.77%. The Mosaic has a consensus price target of $22.3095, indicating a potential downside of 22.88%. Given The Scotts Miracle-Gro's stronger consensus rating and higher possible upside, equities analysts plainly believe The Scotts Miracle-Gro is more favorable than The Mosaic.
Summary
The Scotts Miracle-Gro beats The Mosaic on 13 of the 17 factors compared between the two stocks.
