Better Buy: Aphria vs. Tilray
The Canadian cannabis industry achieved a major milestone this summer, when the legal marijuana market generated higher sales than the black market for the first time ever, according to data from Statistics Canada. Because the industry is experiencing high consumer demand amid the coronavirus pandemic and continues to steal market share from illicit operations, now seems like a good time to invest in Canadian pot stocks again.
Two of the biggest names north of the border are British Columbia-based Tilray (NASDAQ: TLRY) and Aphria (NASDAQ: APHA), which has its headquarters in Ontario. But there's much more than geography that separates these two companies. One may be a little too dependent on the international market, while the other has significant exposure to a volatile hemp sector. Let's take a look at which makes for a better investment right now.
Shares of Tilray are down almost 70% in 2020. To contrarian investors, this dip makes Tilray an appealing buy because of its extra room to grow, should its business recover. The company released its recent second-quarter results on Aug. 10 for the period ended June 30, and its sales of $50.4 million were up a modest 10% from the prior-year period. A mixed bag of results showed its international medical segment climbing to $8.3 million and up 349% year over year, while the adult-use market rose by 17% to $17.6 million. Hemp revenue, meanwhile, grew by just 2% to $20.2 million. While diversification is a strong point for the company, it also makes it very difficult to predict exactly how well the business will fare in future quarters.
Source Fool.com
