Fastenal (NASDAQ:FAST) and AeroGrow International (OTCMKTS:AERO) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, valuation and profitability.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Fastenal and AeroGrow International, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Fastenal | 1 | 9 | 4 | 0 | 2.21 |
| AeroGrow International | 0 | 0 | 0 | 0 | N/A |
Fastenal currently has a consensus price target of $56.50, indicating a potential upside of 3.50%. Given Fastenal’s higher possible upside, equities research analysts plainly believe Fastenal is more favorable than AeroGrow International.
Dividends
Fastenal pays an annual dividend of $1.60 per share and has a dividend yield of 2.9%. AeroGrow International does not pay a dividend. Fastenal pays out 82.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Fastenal has raised its dividend for 8 consecutive years.
Profitability
This table compares Fastenal and AeroGrow International’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Fastenal | 15.25% | 32.29% | 23.25% |
| AeroGrow International | 2.01% | 5.82% | 3.73% |
Volatility and Risk
Fastenal has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, AeroGrow International has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.
Earnings & Valuation
This table compares Fastenal and AeroGrow International’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Fastenal | $4.39 billion | 3.57 | $578.60 million | $1.93 | 28.28 |
| AeroGrow International | $32.30 million | 2.44 | -$440,000.00 | N/A | N/A |
Fastenal has higher revenue and earnings than AeroGrow International.
Insider & Institutional Ownership
85.1% of Fastenal shares are owned by institutional investors. Comparatively, 0.0% of AeroGrow International shares are owned by institutional investors. 0.6% of Fastenal shares are owned by insiders. Comparatively, 12.8% of AeroGrow International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Summary
Fastenal beats AeroGrow International on 12 of the 15 factors compared between the two stocks.
About Fastenal
Fastenal Company, together with its subsidiaries, engages in the wholesale distribution of industrial and construction supplies in the United States, Canada, and internationally. It offers fasteners, and other industrial and construction supplies under the Fastenal name. The company’s fastener products include threaded fasteners, such as bolts, nuts, screws, studs, and related washers, which are used in manufactured products and construction projects, as well as in the maintenance and repair of machines. It also offers miscellaneous supplies and hardware, including various pins and machinery keys, concrete anchors, metal framing systems, wire ropes, strut products, rivets, and related accessories. The company serves the manufacturing market comprising original equipment manufacturers; maintenance, repair, and operations; and non-residential construction market, which includes general, electrical, plumbing, sheet metal, and road contractors. It also serves farmers, truckers, railroads, mining companies, schools, and retail trades; and oil exploration, production, and refinement companies, as well as federal, state, and local governmental entities. As of December 31, 2017, the company distributed its products through a network of 2,383 company owned stores. Fastenal Company was founded in 1967 and is headquartered in Winona, Minnesota.
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 décor 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.
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