AeroGrow International (OTCMKTS:AERO) and Ferguson (OTCMKTS:FERGY) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Risk and Volatility

AeroGrow International has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, Ferguson has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for AeroGrow International and Ferguson, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AeroGrow International 0 0 0 0 N/A
Ferguson 0 3 1 0 2.25

Profitability

This table compares AeroGrow International and Ferguson’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AeroGrow International 2.01% 5.82% 3.73%
Ferguson N/A N/A N/A

Earnings & Valuation

This table compares AeroGrow International and Ferguson’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AeroGrow International $32.30 million 2.50 -$440,000.00 N/A N/A
Ferguson $20.75 billion 0.69 $1.27 billion $0.44 13.98

Ferguson has higher revenue and earnings than AeroGrow International.

Dividends

Ferguson pays an annual dividend of $0.23 per share and has a dividend yield of 3.7%. AeroGrow International does not pay a dividend. Ferguson pays out 52.3% of its earnings in the form of a dividend.

Institutional & Insider Ownership

0.0% of AeroGrow International shares are owned by institutional investors. Comparatively, 0.2% of Ferguson shares are owned by institutional investors. 12.8% of AeroGrow International shares are owned by company 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.

Summary

AeroGrow International beats Ferguson on 7 of the 13 factors compared between the two stocks.

About AeroGrow International

AeroGrow International, Inc. engages in the development, marketing, direct-selling, and wholesale of indoor garden systems to consumers and retailers in the United States, Canada, and various countries in Europe. The company's principal products include indoor gardens and proprietary seed pod kits that allow consumers to grow vegetables, such as tomatoes, chili peppers, and salad greens; fresh herbs comprising cilantro, chives, basil, dill, oregano, and mint; and flowers, which comprise petunias, snapdragons, geraniums, and vinca. It also provides grow lights and a patented nutrient formula, as well as various cooking, gardening, and decor accessories. The company offers its in-home garden systems under the AeroGardens name. Its products are used in the gardening, cooking, healthy eating, and home and office d├ęcor markets. It also provides its products through direct-to-consumer sales channels, including direct mail catalogue, email marketing, and Internet marketing. The company was founded in 2002 and is headquartered in Boulder, Colorado. AeroGrow International, Inc. is a subsidiary of SMG Growing Media, Inc.

About Ferguson

Ferguson plc distributes plumbing and heating products in the United States, the United Kingdom, Canada, and Central Europe. It offers plumbing and heating solutions to customers in the residential, municipal, and commercial sectors for repair, maintenance, and improvement (RMI), as well as new construction markets. The company also distributes pipes, valves, fittings, hydrants, meters, and related water management products, as well as offers related services, such as water line tapping and pipe fusion services. In addition, it distributes heating, ventilation, air conditioning, and refrigeration equipment to specialist contractors primarily in the residential and commercial markets for repair and replacement; and PVF products to industrial customers. Further, the company fabricates and supplies fire protection systems primarily to commercial contractors for new construction projects, as well as offers products, services, and solutions to enable maintenance of facilities across various RMI markets. Additionally, it offers supply chain management solutions for PVF and maintenance, repair, and operations. The company sells its home improvement products directly to consumers, as well as through a network of online stores. It operates its B2B business primarily under the Ferguson brand; and B2C business under the Build.com brand. The company provides products and services for maintenance of multi-family properties, government agencies, hospitality, education, healthcare, and other facilities. It operates a network of 2,310 branches and 22 distribution centers. The company was formerly known as Wolseley plc and changed its name to Ferguson plc in July 2017. Ferguson plc was founded in 1887 and is headquartered in Zug, Switzerland.

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