Analyzing Scotts Miracle-Gro (SMG) & Terra Nitrogen (TNH)

Scotts Miracle-Gro (NYSE: SMG) and Terra Nitrogen (NYSE:TNH) are both basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.

Risk and Volatility

Scotts Miracle-Gro has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500. Comparatively, Terra Nitrogen has a beta of -0.03, indicating that its stock price is 103% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Scotts Miracle-Gro and Terra Nitrogen, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Scotts Miracle-Gro 1 2 1 0 2.00
Terra Nitrogen 0 0 0 0 N/A

Scotts Miracle-Gro presently has a consensus price target of $101.33, indicating a potential upside of 17.60%. Given Scotts Miracle-Gro’s higher probable upside, equities analysts clearly believe Scotts Miracle-Gro is more favorable than Terra Nitrogen.

Dividends

Scotts Miracle-Gro pays an annual dividend of $2.12 per share and has a dividend yield of 2.5%. Terra Nitrogen pays an annual dividend of $8.12 per share and has a dividend yield of 9.7%. Scotts Miracle-Gro pays out 53.8% of its earnings in the form of a dividend. Scotts Miracle-Gro has raised its dividend for 8 consecutive years.

Insider and Institutional Ownership

67.1% of Scotts Miracle-Gro shares are held by institutional investors. Comparatively, 3.5% of Terra Nitrogen shares are held by institutional investors. 29.1% of Scotts Miracle-Gro shares are held by insiders. Comparatively, 2.0% of Terra Nitrogen shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Scotts Miracle-Gro and Terra Nitrogen’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Scotts Miracle-Gro $2.64 billion 1.81 $218.30 million $3.94 21.87
Terra Nitrogen $397.20 million 3.91 $153.90 million N/A N/A

Scotts Miracle-Gro has higher revenue and earnings than Terra Nitrogen.

Profitability

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

Net Margins Return on Equity Return on Assets
Scotts Miracle-Gro 9.15% 40.86% 7.82%
Terra Nitrogen 38.75% 41.57% 38.41%

Summary

Scotts Miracle-Gro beats Terra Nitrogen on 9 of the 15 factors compared between the two stocks.

Scotts Miracle-Gro Company Profile

The Scotts Miracle-Gro Company manufactures, markets, and sells consumer lawn and garden products. The company operates through three segments: U.S. Consumer, Hawthorne, and Other. It offers lawn care products, including lawn fertilizers, grass seed products, spreaders, other durable products, and outdoor cleaners, as well as lawn-related weed, pest, and disease control products. The company also provides gardening and landscape products, such as water soluble and continuous-release plant foods, potting mixes and garden soils, mulch and decorative groundcover products, plant-related pest and disease control products, organic garden products, and live goods and seeding solutions. In addition, it offers hydroponic products that help users grow plants, flowers, and vegetables in an indoor or urban environment; and insect control products, rodent control products, and weed control products for home areas. The company offers its products under the Scotts, Turf Builder, EZ Seed, LiquaFeed, Water Smart, PatchMaster, GrubEx, EdgeGuard, Snap, Handy Green II, Scotts OxiCleanTM3, Miracle-Gro, Osmocote, Hyponex, Earthgro, SuperSoil, Ortho, Nature Scape, Miracle-Gro Organic Choice, Nature's Care, Whitney Farms, EcoScraps, Gro-ables, General Hydroponics, Gavita, AeroGarden, Botanicare, Vermicrop, Agrolux, Can-Filters, Fafard, Ortho, Tomcat, Roundup, and Groundclear brand names. It serves home centers, mass merchandisers, warehouse clubs, large hardware chains, independent hardware stores, nurseries, garden centers, food and drug stores, and indoor gardening and hydroponic distributors and retailers through a direct sales force, and network of brokers and distributors. The Scotts Miracle-Gro Company was founded in 1868 and is headquartered in Marysville, Ohio.

Terra Nitrogen Company Profile

Terra Nitrogen Company, L.P. (TNCLP) is a limited partnership that produces nitrogen fertilizer products. The Company’s principal products are anhydrous ammonia (ammonia) and urea ammonium nitrate solutions (UAN), which it manufactures at its facility in Verdigris, Oklahoma. Its nitrogen products are used primarily by farmers. For the year ended December 31, 2016, it had sold 2.2 million tons of nitrogen fertilizers. The Company has production facility, in Verdigris, Oklahoma. As of December 31, 2016, it had two ammonia plants, two nitric acid plants and two UAN plants. The Company conducts its operations through an operating partnership, Terra Nitrogen, Limited Partnership (TNLP). Terra Nitrogen GP Inc. is the general partner of both TNCLP and TNLP and owns a 0.025% general partner interest in each of TNCLP and TNLP. The General Partner is an indirect subsidiary of CF Industries Holdings, Inc., which is engaged in the manufacturing and distribution of nitrogen products.

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