GrowGeneration (NASDAQ:GRWG) versus DICK’S Sporting Goods (NYSE:DKS) Critical Review

GrowGeneration (NASDAQ:GRWG) and DICK’S Sporting Goods (NYSE:DKS) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitability and risk.

Institutional and Insider Ownership

36.0% of GrowGeneration shares are held by institutional investors. Comparatively, 89.8% of DICK’S Sporting Goods shares are held by institutional investors. 8.1% of GrowGeneration shares are held by company insiders. Comparatively, 28.9% of DICK’S Sporting Goods shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

GrowGeneration has a beta of 2.51, suggesting that its share price is 151% more volatile than the S&P 500. Comparatively, DICK’S Sporting Goods has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.

Profitability

This table compares GrowGeneration and DICK’S Sporting Goods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GrowGeneration	-10.07%	-17.44%	-11.52%
DICK’S Sporting Goods	4.71%	22.22%	7.02%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for GrowGeneration and DICK’S Sporting Goods, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GrowGeneration	1	1	1	0	2.00
DICK’S Sporting Goods	1	3	12	1	2.76

GrowGeneration presently has a consensus target price of $2.50, suggesting a potential upside of 35.87%. DICK’S Sporting Goods has a consensus target price of $258.44, suggesting a potential upside of 34.92%. Given GrowGeneration’s higher possible upside, equities analysts clearly believe GrowGeneration is more favorable than DICK’S Sporting Goods.

Valuation & Earnings

This table compares GrowGeneration and DICK’S Sporting Goods”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GrowGeneration	$161.74 million	0.67	-$24.05 million	($0.27)	-6.81
DICK’S Sporting Goods	$17.22 billion	1.00	$849.24 million	$10.52	18.21

DICK’S Sporting Goods has higher revenue and earnings than GrowGeneration. GrowGeneration is trading at a lower price-to-earnings ratio than DICK’S Sporting Goods, indicating that it is currently the more affordable of the two stocks.

Summary

DICK’S Sporting Goods beats GrowGeneration on 13 of the 15 factors compared between the two stocks.

About GrowGeneration

GrowGeneration Corp., through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. The company engages in the marketing and distribution of nutrients, additives, growing media, lighting, and environmental control systems, as well as other indoor and outdoor growing products. It operates a chain of stores in California, Colorado, Michigan, Maine, Oklahoma, Oregon, Washington, Montana, New York, Ohio, Mississippi, Missouri, Arizona, Rhode Island, Florida, Massachusetts, Virginia, New Jersey, and New Mexico, as well as growgeneration.com, an online superstore for cultivators, a wholesale business for resellers, HRG Distribution, and benching, racking, and storage solutions and MMI. The company was formerly known as Easylife Corp. GrowGeneration Corp. was founded in 2008 and is based in Greenwood Village, Colorado.

About DICK’S Sporting Goods

DICK’s Sporting Goods, Inc. engages in the retailing of an extensive assortment of authentic sports equipment, apparel, footwear, and accessories. It also offers its products both online and through mobile applications. The company was founded by Richard T. Stack in 1948 and is headquartered in Coraopolis, PA.