Critical Survey: LyondellBasell Industries (NYSE:LYB) and Scotts Miracle-Gro (NYSE:SMG)

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

Dividends

Scotts Miracle-Gro pays an annual dividend of $2.64 per share and has a dividend yield of 4.8%. LyondellBasell Industries pays an annual dividend of $2.76 per share and has a dividend yield of 4.3%. Scotts Miracle-Gro pays out 229.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. LyondellBasell Industries pays out -244.2% of its earnings in the form of a dividend. LyondellBasell Industries has increased its dividend for 14 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Scotts Miracle-Gro and LyondellBasell Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scotts Miracle-Gro	0	2	4	0	2.67
LyondellBasell Industries	4	10	6	1	2.19

Scotts Miracle-Gro presently has a consensus target price of $70.20, suggesting a potential upside of 28.65%. LyondellBasell Industries has a consensus target price of $71.50, suggesting a potential upside of 11.72%. Given Scotts Miracle-Gro’s stronger consensus rating and higher probable upside, equities analysts clearly believe Scotts Miracle-Gro is more favorable than LyondellBasell Industries.

Institutional and Insider Ownership

74.1% of Scotts Miracle-Gro shares are held by institutional investors. Comparatively, 71.2% of LyondellBasell Industries shares are held by institutional investors. 24.4% of Scotts Miracle-Gro shares are held by company insiders. Comparatively, 0.1% of LyondellBasell Industries shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Scotts Miracle-Gro and LyondellBasell Industries”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scotts Miracle-Gro	$3.41 billion	0.93	$145.20 million	$1.15	47.45
LyondellBasell Industries	$30.15 billion	0.69	-$738.00 million	($1.13)	-56.64

Scotts Miracle-Gro has higher earnings, but lower revenue than LyondellBasell Industries. LyondellBasell Industries 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 & Risk

Scotts Miracle-Gro has a beta of 1.87, meaning that its share price is 87% more volatile than the S&P 500. Comparatively, LyondellBasell Industries has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500.

Profitability

This table compares Scotts Miracle-Gro and LyondellBasell Industries’ 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%
LyondellBasell Industries	-1.13%	17.44%	5.30%

Summary

Scotts Miracle-Gro beats LyondellBasell Industries on 12 of the 18 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 LyondellBasell Industries

LyondellBasell Industries N.V. operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. The company operates in six segments: Olefins and PolyolefinsAmericas; Olefins and PolyolefinsEurope, Asia, International; Intermediates and Derivatives; Advanced Polymer Solutions; Refining; and Technology. It produces and markets olefins and co-products, polyethylene, and polypropylene; and propylene oxide and derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol. In addition, the company produce and markets compounding and solutions including polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers including catalloy and polybutene-1; and refines heavy, high-sulfur crude oil and other crude oils, as well as refined products, including gasoline and distillates. Further, it develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications. LyondellBasell Industries N.V. was incorporated in 2009 and is headquartered in Houston, Texas.