Reviewing Sugarmade (SGMD) and Veritiv (VRTV)

Sugarmade (OTCMKTS:SGMD) and Veritiv (NYSE:VRTV) are both small-cap basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, earnings, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Sugarmade and Veritiv, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sugarmade 0 0 0 0 N/A
Veritiv 1 3 1 0 2.00

Veritiv has a consensus target price of $35.60, indicating a potential upside of 6.78%. Given Veritiv’s higher probable upside, analysts plainly believe Veritiv is more favorable than Sugarmade.

Profitability

This table compares Sugarmade and Veritiv’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sugarmade -111.65% N/A -363.63%
Veritiv -0.33% 7.33% 1.47%

Valuation and Earnings

This table compares Sugarmade and Veritiv’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sugarmade $4.10 million 6.96 -$4.71 million N/A N/A
Veritiv $8.36 billion 0.06 -$13.30 million ($0.85) -39.22

Sugarmade has higher earnings, but lower revenue than Veritiv.

Insider & Institutional Ownership

95.2% of Veritiv shares are held by institutional investors. 5.2% of Sugarmade shares are held by insiders. Comparatively, 0.8% of Veritiv shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Sugarmade has a beta of -5.8, indicating that its stock price is 680% less volatile than the S&P 500. Comparatively, Veritiv has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.

Summary

Veritiv beats Sugarmade on 8 of the 11 factors compared between the two stocks.

About Sugarmade

Sugarmade, Inc. provides paper products derived from non-wood sources. The company produces and wholesales custom printed and generic supplies, including double poly paper, disposable, clear, plastic cold, paper coffee, yogurt, and ice cream cups, as well as cup lids, cup sleeves, food containers, soup containers, plastic spoons, and other products for quick service restaurant industry. It also engages in the manufacturing and distribution of various technologies and products, such as soil containing grow bags used in greenhouses, odor-resistant storage and transport products, lights to enhanced indoor cultivation, and other products that support the legal cultivation and processing of cannabis and other agricultural products through caligrownsupplies.com Website to distributors and retailers. In addition, the company distributes paper made from reclaimed sugarcane fiber; and offers Sriracha Seasoning Stix and Seasoning Stix blends through SrirachaStix.com Web platform. Sugarmade, Inc. was founded in 2009 and is headquartered in City of Industry, California.

About Veritiv

Veritiv Corporation operates as a business-to-business distributor of packaging, facility solutions, print, and publishing products and services in the United States, Canada, and internationally. It operates through four segments: Packaging, Facility Solutions, Print, and Publishing. The Packaging segment offers standard and custom packaging solutions. The Facility Solutions segment sources and sells cleaning, break-room, and other supplies, such as towels, tissues, wipers and dispensers, can liners, commercial cleaning chemicals, soaps and sanitizers, sanitary maintenance supplies and equipment, safety and hazard supplies, and shampoos and amenities. The Print segment sells and distributes commercial printing, writing, copying, digital, wide format, and specialty paper products; and graphics consumables and equipment. It also provides customized paper conversion services of commercial printing paper for distribution to document centers and form printers. The Publishing segment sells and distributes coated and uncoated commercial printing papers to publishers, retailers, converters, printers, and specialty businesses for use in magazines, catalogs, books, directories, gaming, couponing, retail inserts, and direct mail. This segment also provides print management, procurement, and supply chain management solutions. The company also offers logistics and supply chain management solutions. It offers its products under the Endurance, nordic+, Econosource, Comet, Starbrite Opaque Select, TUFflex, Reliable, and Spring Grove brands, as well as other brands to printers, publishers, data centers, manufacturers, higher education institutions, healthcare facilities, sporting and performance arenas, retail stores, government agencies, property managers, and building service contractors. As of March 1, 2018, the company operated 170 distribution centers. Veritiv Corporation was incorporated in 2013 and is based in Atlanta, Georgia.

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