Head to Head Review: GrowGeneration (NASDAQ:GRWG) vs. DICK’S Sporting Goods (NYSE:DKS)

DICK’S Sporting Goods (NYSE:DKS) and GrowGeneration (NASDAQ:GRWG) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.

Analyst Ratings

This is a summary of recent recommendations for DICK’S Sporting Goods and GrowGeneration, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DICK’S Sporting Goods	1	3	12	1	2.76
GrowGeneration	1	1	1	0	2.00

DICK’S Sporting Goods presently has a consensus target price of $258.44, suggesting a potential upside of 34.92%. GrowGeneration has a consensus target price of $2.50, suggesting a potential upside of 35.87%. Given GrowGeneration’s higher probable upside, analysts plainly believe GrowGeneration is more favorable than DICK’S Sporting Goods.

Profitability

This table compares DICK’S Sporting Goods and GrowGeneration’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DICK’S Sporting Goods	4.71%	22.22%	7.02%
GrowGeneration	-10.07%	-17.44%	-11.52%

Valuation & Earnings

This table compares DICK’S Sporting Goods and GrowGeneration”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DICK’S Sporting Goods	$17.22 billion	1.00	$849.24 million	$10.52	18.21
GrowGeneration	$161.74 million	0.67	-$24.05 million	($0.27)	-6.81

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

Risk and Volatility

DICK’S Sporting Goods has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500. Comparatively, GrowGeneration has a beta of 2.51, indicating that its share price is 151% more volatile than the S&P 500.

Institutional & Insider Ownership

89.8% of DICK’S Sporting Goods shares are owned by institutional investors. Comparatively, 36.0% of GrowGeneration shares are owned by institutional investors. 28.9% of DICK’S Sporting Goods shares are owned by insiders. Comparatively, 8.1% of GrowGeneration shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

DICK’S Sporting Goods beats GrowGeneration on 13 of the 15 factors compared between the two stocks.

About DICK’S Sporting Goods

DICK’s Sporting Goods, Inc. engages in the retailing of an extensive assortment of authentic sports equipment, apparel, footwear, and accessories. It also offers its products both online and through mobile applications. The company was founded by Richard T. Stack in 1948 and is headquartered in Coraopolis, PA.

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.