Critical Contrast: Scotts Miracle-Gro (NYSE:SMG) versus Danakali (OTCMKTS:SBMSF)

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

Insider & Institutional Ownership

74.1% of Scotts Miracle-Gro shares are held by institutional investors. 26.5% of Scotts Miracle-Gro shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Danakali	N/A	N/A	N/A	N/A	N/A
Scotts Miracle-Gro	$3.55 billion	1.08	-$380.10 million	($7.04)	-9.62

Danakali has higher earnings, but lower revenue than Scotts Miracle-Gro.

Analyst Recommendations

This is a summary of recent ratings and price targets for Danakali and Scotts Miracle-Gro, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Danakali	0	0	0	0	N/A
Scotts Miracle-Gro	0	4	1	0	2.20

Scotts Miracle-Gro has a consensus price target of $70.00, indicating a potential upside of 3.32%. Given Scotts Miracle-Gro’s higher probable upside, analysts plainly believe Scotts Miracle-Gro is more favorable than Danakali.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Danakali	N/A	N/A	N/A
Scotts Miracle-Gro	-11.52%	-44.37%	1.02%

Summary

Scotts Miracle-Gro beats Danakali on 6 of the 8 factors compared between the two stocks.

About Danakali

Danakali Limited, together with its subsidiaries, engages in the exploration of minerals in Eritrea, East Africa. The company focuses on the development of the Colluli potash project located in the Danakil Depression region of Eritrea. The company was formerly known as South Boulder Mines Ltd. and changed its name to Danakali Limited in June 2015. Danakali Limited was incorporated in 2001 and is based in North Perth, Australia.

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.