Analyzing Valvoline (NYSE:VVV) & GrowGeneration (NASDAQ:GRWG)

GrowGeneration (NASDAQ:GRWG) and Valvoline (NYSE:VVV) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Insider and Institutional Ownership

36.0% of GrowGeneration shares are owned by institutional investors. Comparatively, 96.1% of Valvoline shares are owned by institutional investors. 8.1% of GrowGeneration shares are owned by insiders. Comparatively, 0.7% of Valvoline shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares GrowGeneration and Valvoline’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GrowGeneration	-10.07%	-17.44%	-11.52%
Valvoline	5.17%	65.12%	7.11%

Analyst Ratings

This is a summary of current ratings and recommmendations for GrowGeneration and Valvoline, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GrowGeneration	1	1	1	0	2.00
Valvoline	0	5	12	0	2.71

GrowGeneration presently has a consensus price target of $2.50, indicating a potential upside of 59.24%. Valvoline has a consensus price target of $43.06, indicating a potential upside of 60.64%. Given Valvoline’s stronger consensus rating and higher possible upside, analysts clearly believe Valvoline is more favorable than GrowGeneration.

Risk and Volatility

GrowGeneration has a beta of 2.56, suggesting that its stock price is 156% more volatile than the S&P 500. Comparatively, Valvoline has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500.

Earnings and Valuation

This table compares GrowGeneration and Valvoline”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GrowGeneration	$161.74 million	0.57	-$24.05 million	($0.27)	-5.81
Valvoline	$1.71 billion	2.00	$210.70 million	$0.80	33.51

Valvoline has higher revenue and earnings than GrowGeneration. GrowGeneration is trading at a lower price-to-earnings ratio than Valvoline, indicating that it is currently the more affordable of the two stocks.

Summary

Valvoline beats GrowGeneration on 12 of the 14 factors compared between the two stocks.

About GrowGeneration

GrowGeneration Corp., through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. The company engages in the marketing and distribution of nutrients, additives, growing media, lighting, and environmental control systems, as well as other indoor and outdoor growing products. It operates a chain of stores in California, Colorado, Michigan, Maine, Oklahoma, Oregon, Washington, Montana, New York, Ohio, Mississippi, Missouri, Arizona, Rhode Island, Florida, Massachusetts, Virginia, New Jersey, and New Mexico, as well as growgeneration.com, an online superstore for cultivators, a wholesale business for resellers, HRG Distribution, and benching, racking, and storage solutions and MMI. The company was formerly known as Easylife Corp. GrowGeneration Corp. was founded in 2008 and is based in Greenwood Village, Colorado.

About Valvoline

Valvoline Inc. engages in the operation and franchising of vehicle service centers and retail stores in the United States and Canada. The company, through its service centers, provides fluid exchange for motor oil, transmission and differential fluid, and coolant; parts replacement for batteries, filters, wiper blades, and belts; and safety services, such as tire inflation and rotation, bulbs, and safety checks. It offers its services for passenger cars, hybrid and battery electric vehicles, and light and medium duty vehicles. The company was founded in 1866 and is headquartered in Lexington, Kentucky.