Reviewing Limoneira (NASDAQ:LMNR) & Scotts Miracle-Gro (NYSE:SMG)

Limoneira (NASDAQ:LMNR) and Scotts Miracle-Gro (NYSE:SMG) are both consumer staples companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Institutional & Insider Ownership

64.4% of Limoneira shares are owned by institutional investors. Comparatively, 74.1% of Scotts Miracle-Gro shares are owned by institutional investors. 8.9% of Limoneira 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 endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Limoneira	-10.01%	-8.79%	-5.30%
Scotts Miracle-Gro	4.26%	-67.74%	7.01%

Dividends

Limoneira pays an annual dividend of $0.30 per share and has a dividend yield of 2.2%. Scotts Miracle-Gro pays an annual dividend of $2.64 per share and has a dividend yield of 4.2%. Limoneira pays out -32.3% of its earnings in the form of a dividend. Scotts Miracle-Gro pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current ratings and price targets for Limoneira and Scotts Miracle-Gro, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Limoneira	2	1	2	0	2.00
Scotts Miracle-Gro	0	3	5	0	2.63

Limoneira currently has a consensus target price of $18.50, suggesting a potential upside of 34.94%. Scotts Miracle-Gro has a consensus target price of $69.50, suggesting a potential upside of 11.30%. Given Limoneira’s higher possible upside, equities analysts clearly believe Limoneira is more favorable than Scotts Miracle-Gro.

Earnings and Valuation

This table compares Limoneira 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
Limoneira	$159.72 million	1.56	-$15.98 million	($0.93)	-14.74
Scotts Miracle-Gro	$3.41 billion	1.06	$145.20 million	$2.42	25.80

Scotts Miracle-Gro has higher revenue and earnings than Limoneira. Limoneira 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.

Volatility and Risk

Limoneira has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, Scotts Miracle-Gro has a beta of 1.95, suggesting that its share price is 95% more volatile than the S&P 500.

Summary

Scotts Miracle-Gro beats Limoneira on 12 of the 16 factors compared between the two stocks.

About Limoneira

Limoneira Company operates as an agribusiness and real estate development company in the United States and internationally. The company operates through three divisions: Agribusiness, Rental Operations, and Real Estate Development. It grows, processes, packs, markets, and sells lemons. The company also grows avocado, oranges, and specialty citrus and other crops, including Moro blood oranges, Cara Cara oranges, Valencia oranges, Minneola tangelos, Star Ruby grapefruit, pummelos, and wine grapes. It has approximately 3,500 acres of lemons planted primarily in Ventura, Tulare, San Luis Obispo, and San Bernardino Counties in California; and Jujuy, Argentina, as well in Yuma County, Arizona, and La Serena, Chile; 1,200 acres of avocados planted in Ventura County; 100 acres of oranges planted in Tulare County, California; and 400 acres of specialty citrus and other crops. In addition, the company rents residential housing units and commercial office buildings, as well as leases approximately 400 acres of its land to third-party agricultural tenants. Further, it is involved in the organic recycling operations; and development of land parcels, multi-family housing, and single-family homes. The company markets and sells its lemons directly to food service, wholesale, and retail customers; avocados, oranges, specialty citrus, and other crops to third-party packinghouses; and wine grapes to wine producers. Limoneira Company was founded in 1893 and is headquartered in Santa Paula, California.

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.