Calavo Growers (NASDAQ:CVGW) vs. Scotts Miracle-Gro (NYSE:SMG) Financial Review

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Calavo Growers and Scotts Miracle-Gro, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Calavo Growers	0	2	1	0	2.33
Scotts Miracle-Gro	0	3	5	0	2.63

Calavo Growers currently has a consensus price target of $33.50, indicating a potential upside of 28.50%. Scotts Miracle-Gro has a consensus price target of $71.00, indicating a potential upside of 3.86%. Given Calavo Growers’ higher probable upside, research analysts clearly believe Calavo Growers is more favorable than Scotts Miracle-Gro.

Dividends

Calavo Growers pays an annual dividend of $0.80 per share and has a dividend yield of 3.1%. Scotts Miracle-Gro pays an annual dividend of $2.64 per share and has a dividend yield of 3.9%. Calavo Growers pays out 72.7% of its earnings in the form of a dividend. Scotts Miracle-Gro pays out 179.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Calavo Growers has raised its dividend for 1 consecutive years.

Earnings and Valuation

This table compares Calavo Growers and Scotts Miracle-Gro”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Calavo Growers	$648.43 million	0.72	$19.80 million	$1.10	23.70
Scotts Miracle-Gro	$3.41 billion	1.16	$145.20 million	$1.47	46.50

Scotts Miracle-Gro has higher revenue and earnings than Calavo Growers. Calavo Growers 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.

Institutional and Insider Ownership

81.3% of Calavo Growers shares are owned by institutional investors. Comparatively, 74.1% of Scotts Miracle-Gro shares are owned by institutional investors. 7.2% of Calavo Growers 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 hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Calavo Growers	3.05%	13.43%	9.14%
Scotts Miracle-Gro	2.68%	-68.59%	7.29%

Volatility & Risk

Calavo Growers has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500. Comparatively, Scotts Miracle-Gro has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500.

Summary

Scotts Miracle-Gro beats Calavo Growers on 10 of the 17 factors compared between the two stocks.

About Calavo Growers

Calavo Growers, Inc. markets and distributes avocados, prepared avocados, and other perishable foods to retail grocery and foodservice customers, club stores, mass merchandisers, food distributors, and wholesale customers worldwide. It operates through Grown and Prepared segments. The Grown segment distributes tomatoes and papayas; and procures avocados grown in California, Mexico, Peru, and Colombia. The Prepared segment is involved in the distribution of prepared avocado products, salsa, fresh-cut fruit and vegetables, fresh prepared entrees salads, wraps, sandwiches, parfaits, and fresh snacking products, as well as ready-to-heat entrees, other hot bars and various deli items, meals kit components, and salad kits. It offers its products under the Calavo brands and related logos; and Avo Fresco, Bueno, Avo Fresco, Bueno, Calavo Gold, Celebrate the Taste, El Dorado, Taste of Paradise, The First Name in Avocados, The Family of Fresh, ProRipeVIP, RIPE NOW!, Renaissance Food Group, Garden Highway Fresh Cut, Garden Highway, and Garden Highway Chef Essentials trademarks. Calavo Growers, Inc. was founded in 1924 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.