Critical Review: Charlie’s (OTCMKTS:CHUC) versus 22nd Century Group (NASDAQ:XXII)

22nd Century Group (NASDAQ:XXII) and Charlie’s (OTCMKTS:CHUC) are both small-cap consumer staples companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Volatility and Risk

22nd Century Group has a beta of 1.95, indicating that its stock price is 95% more volatile than the S&P 500. Comparatively, Charlie’s has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.

Profitability

This table compares 22nd Century Group and Charlie’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
22nd Century Group	-80.22%	-344.13%	-62.82%
Charlie’s	19.36%	-174.49%	36.91%

Earnings and Valuation

This table compares 22nd Century Group and Charlie’s”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
22nd Century Group	$8.86 million	0.72	-$15.16 million	($2,986.49)	0.00
Charlie’s	$8.49 million	10.52	-$4.16 million	$0.01	33.00

Charlie’s has lower revenue, but higher earnings than 22nd Century Group. 22nd Century Group is trading at a lower price-to-earnings ratio than Charlie’s, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

18.1% of 22nd Century Group shares are held by institutional investors. Comparatively, 7.8% of Charlie’s shares are held by institutional investors. 0.0% of 22nd Century Group shares are held by company insiders. Comparatively, 20.9% of Charlie’s shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for 22nd Century Group and Charlie’s, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
22nd Century Group	1	0	0	0	1.00
Charlie’s	0	0	0	0	0.00

Summary

Charlie’s beats 22nd Century Group on 8 of the 12 factors compared between the two stocks.

About 22nd Century Group

22nd Century Group, Inc., a tobacco products company, engages in the sale and distribution of its own proprietary new reduced nicotine tobacco products. The company offers reduced nicotine content tobacco plants and very low nicotine combustible cigarette products. It also provides contract manufacturing services for conventional combustible tobacco products for third-party brands. The company was founded in 1998 and is headquartered in Mocksville, North Carolina.

About Charlie’s

Charlie's Holdings, Inc., together with its subsidiaries, formulates, markets, and distributes non-combustible nicotine-related, alternative alkaloid vapor, and hemp-derived vapor and edible products. It sells its products through distributors, specialty retailers, and third-party online resellers in the United States, the United Kingdom, Italy, Spain, New Zealand, Australia, and Canada. Charlie's Holdings, Inc. was founded in 2014 and is headquartered in Costa Mesa, California.