Scotts Miracle-Gro (NYSE:SMG) & Axalta Coating Systems (NYSE:AXTA) Critical Analysis

Scotts Miracle-Gro (NYSE:SMG) and Axalta Coating Systems (NYSE:AXTA) are both mid-cap materials companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Scotts Miracle-Gro and Axalta Coating Systems, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scotts Miracle-Gro	0	2	4	0	2.67
Axalta Coating Systems	0	8	4	1	2.46

Scotts Miracle-Gro currently has a consensus price target of $70.20, suggesting a potential upside of 32.74%. Axalta Coating Systems has a consensus price target of $38.18, suggesting a potential upside of 13.24%. Given Scotts Miracle-Gro’s stronger consensus rating and higher probable upside, equities analysts clearly believe Scotts Miracle-Gro is more favorable than Axalta Coating Systems.

Volatility and Risk

Scotts Miracle-Gro has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500. Comparatively, Axalta Coating Systems has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500.

Institutional & Insider Ownership

74.1% of Scotts Miracle-Gro shares are owned by institutional investors. Comparatively, 98.3% of Axalta Coating Systems shares are owned by institutional investors. 24.4% of Scotts Miracle-Gro shares are owned by insiders. Comparatively, 0.5% of Axalta Coating Systems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Scotts Miracle-Gro and Axalta Coating Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scotts Miracle-Gro	2.19%	-81.90%	8.97%
Axalta Coating Systems	6.78%	22.35%	7.12%

Earnings and Valuation

This table compares Scotts Miracle-Gro and Axalta Coating Systems”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scotts Miracle-Gro	$3.48 billion	0.88	$145.20 million	$1.15	45.99
Axalta Coating Systems	$5.15 billion	1.40	$378.00 million	$1.62	20.81

Axalta Coating Systems has higher revenue and earnings than Scotts Miracle-Gro. Axalta Coating Systems 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.

Summary

Axalta Coating Systems beats Scotts Miracle-Gro on 8 of the 14 factors compared between the two stocks.

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.

About Axalta Coating Systems

Axalta Coating Systems Ltd., through its subsidiaries, manufactures, markets, and distributes high-performance coatings systems in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company operates through two segments, Performance Coatings and Mobility Coatings. It also offers water and solvent-borne products and systems to repair damaged vehicles for independent body shops, multi-shop operators, and original equipment manufacturer (OEM) dealership body shops. In addition, the company provides functional and decorative liquid, and powder coatings used in various industrial applications, including building materials, cabinet, wood and luxury vinyl flooring and furniture market under the Voltatex, AquaEC, Durapon, Hydropon, UNRIVALED, Ceranamel, Industrial, Corlar Industrial, Tufcote, Imron Industrial, Alesta, Teodur, Nap-Gard, Abcite, and Plascoat brands for powder coatings. Further, it develops and supplies electrocoat, primer, the basecoat, and clearcoat products for OEMs of light and commercial vehicles; and coatings systems for various commercial applications, including HDT, MDT, bus, and rail under the Imron, Imron Elite, Centari, Rival, Corlar epoxy undercoats, and AquaEC brands. The company offers products under the Audurra, Abcite, Alesta, AquaEC, Centari, Ceranamel, Challenger, Chemophan, ColorNet, Cromax, Cromax Mosaic, Durapon 70, Duxone, Harmonized Coating Technologies, Imron ExcelPro, Lutophen, Nason, Spies Hecker, Standox, Stollaquid, Syntopal, Syrox, Raptor, U-POL, and Vermeera brand names. The company was formerly known as Axalta Coating Systems Bermuda Co., Ltd. and changed its name to Axalta Coating Systems Ltd. in August 2014. Axalta Coating Systems Ltd. was founded in 1866 and is headquartered in Glen Mills, Pennsylvania.