NYSE:SMG

Stock Analysis Report

Executive Summary

The Scotts Miracle-Gro Company manufactures, markets, and sells consumer lawn and garden products in the United States and internationally.

Rewards

PE ratio (14x) is below the US market (18.9x)

Earnings grew by 242.6% over the past year

Pays a high and reliable dividend of 2.09%

Risk Analysis

Earnings are forecast to decline by an average of -17.6% per year for the next 3 years

Debt is not well covered by operating cash flow

Large one-off items impacting financial results



Snowflake Analysis

Established dividend payer with proven track record.


Similar Companies

Reckitt Benckiser Group

LSE:RB.

Share Price & News

How has Scotts Miracle-Gro's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SMG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.5%

SMG

2.4%

US Chemicals

1.7%

US Market


1 Year Return

61.1%

SMG

-0.5%

US Chemicals

23.6%

US Market

Return vs Industry: SMG exceeded the US Chemicals industry which returned 1.6% over the past year.

Return vs Market: SMG exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

SMGIndustryMarket
7 Day3.5%2.4%1.7%
30 Day4.8%0.3%3.5%
90 Day9.7%7.1%11.7%
1 Year65.1%61.1%15.2%-0.5%26.2%23.6%
3 Year27.5%18.5%36.5%11.0%53.2%43.3%
5 Year99.2%75.4%50.6%18.4%75.5%56.1%

Price Volatility Vs. Market

How volatile is Scotts Miracle-Gro's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Scotts Miracle-Gro undervalued compared to its fair value and its price relative to the market?

14.17x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SMG ($110.41) is trading above our estimate of fair value ($94.88)

Significantly Below Fair Value: SMG is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SMG is good value based on its PE Ratio (14.1x) compared to the Chemicals industry average (20.8x).

PE vs Market: SMG is good value based on its PE Ratio (14.1x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: SMG's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: SMG is overvalued based on its PB Ratio (8.6x) compared to the US Chemicals industry average (2.2x).


Next Steps

Future Growth

How is Scotts Miracle-Gro forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

-11.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SMG's earnings are forecast to decline over the next 3 years (-17.6% per year).

Earnings vs Market: SMG's earnings are forecast to decline over the next 3 years (-17.6% per year).

High Growth Earnings: SMG's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SMG's revenue (4% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: SMG's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SMG's Return on Equity is forecast to be high in 3 years time (32.2%)


Next Steps

Past Performance

How has Scotts Miracle-Gro performed over the past 5 years?

13.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SMG has a large one-off gain of $245.8M impacting its September 30 2019 financial results.

Growing Profit Margin: SMG's current net profit margins (13.9%) are higher than last year (4.8%).


Past Earnings Growth Analysis

Earnings Trend: SMG's earnings have grown by 13.4% per year over the past 5 years.

Accelerating Growth: SMG's earnings growth over the past year (242.6%) exceeds its 5-year average (13.4% per year).

Earnings vs Industry: SMG earnings growth over the past year (242.6%) exceeded the Chemicals industry -17%.


Return on Equity

High ROE: Whilst SMG's Return on Equity (60.38%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Scotts Miracle-Gro's financial position?


Financial Position Analysis

Short Term Liabilities: SMG's short term assets ($1.0B) exceed its short term liabilities ($620.5M).

Long Term Liabilities: SMG's short term assets ($1.0B) do not cover its long term liabilities ($1.7B).


Debt to Equity History and Analysis

Debt Level: SMG's debt to equity ratio (229.9%) is considered high.

Reducing Debt: SMG's debt to equity ratio has increased from 142.1% to 229.9% over the past 5 years.

Debt Coverage: SMG's debt is not well covered by operating cash flow (13.6%).

Interest Coverage: SMG's interest payments on its debt are well covered by EBIT (4.2x coverage).


Balance Sheet

Inventory Level: SMG has a high level of physical assets or inventory.

Debt Coverage by Assets: SMG's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is Scotts Miracle-Gro's current dividend yield, its reliability and sustainability?

2.08%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%1.4%markettop25%3.7%industryaverage2.1%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: SMG's dividend (2.09%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: SMG's dividend (2.09%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: SMG's dividends per share have been stable in the past 10 years.

Growing Dividend: SMG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28.3%), SMG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SMG's dividends in 3 years are forecast to be well covered by earnings (45.2% payout ratio).


Next Steps

Management

What is the CEO of Scotts Miracle-Gro's salary, the management and board of directors tenure and is there insider trading?

7.7yrs

Average management tenure


CEO

Jim Hagedorn (64yo)

18.7yrs

Tenure

US$7,922,384

Compensation

Mr. James S. Hagedorn, also known as Jim, has been the Chief Executive Officer at The Scotts Miracle-Gro Company since May 2001 and has been the Chairman of the Board since January 2003 and has been its Ex ...


CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD7.92M) is about average for companies of similar size in the US market ($USD6.46M).

Compensation vs Earnings: Jim's compensation has increased by more than 20% in the past year.


Management Age and Tenure

7.7yrs

Average Tenure

58.5yo

Average Age

Experienced Management: SMG's management team is seasoned and experienced (7.7 years average tenure).


Board Age and Tenure

8.1yrs

Average Tenure

66.5yo

Average Age

Experienced Board: SMG's board of directors are considered experienced (8.1 years average tenure).


Insider Trading

Insider Buying: SMG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$238,24215 Nov 19
Denise Stump
EntityIndividual
Role
Head of Human Resources
Executive VP of Global Human Resource & Chief Ethics Officer
Shares2,249.21
Max PriceUS$105.92
SellUS$174,57113 Sep 19
Nathan Baxter
EntityIndividual
Shares1,596
Max PriceUS$110.49
SellUS$269,94609 Sep 19
Nancy Mistretta
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,500
Max PriceUS$107.98
SellUS$690,12115 Aug 19
Thomas Kelly
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares6,167
Max PriceUS$111.91
SellUS$1,011,24115 Aug 19
John Vines
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares9,051
Max PriceUS$111.73
SellUS$557,42115 Aug 19
Adam Hanft
EntityIndividual
Role
Member of the Board of Directors
Director
Shares5,000
Max PriceUS$111.48
SellUS$825,50512 Aug 19
Adam Hanft
EntityIndividual
Role
Member of the Board of Directors
Director
Shares7,500
Max PriceUS$110.07
SellUS$17,681,73209 Aug 19
Hagedorn Partnership LP
EntityCompany
Shares161,706
Max PriceUS$110.10
SellUS$190,19408 Aug 19
James King
EntityIndividual
Role
Head of Corporate Communications
Chief Communications Officer
Shares1,751
Max PriceUS$108.62
SellUS$18,864,05007 Aug 19
Hagedorn Partnership LP
EntityCompany
Shares173,336
Max PriceUS$109.83
SellUS$2,200,68406 Aug 19
James Hagedorn
EntityIndividual
Role
Chief Executive Officer
CEO & Chairman of the Board
Shares20,259
Max PriceUS$108.91
SellUS$638,31306 Aug 19
Ivan Smith
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares5,796
Max PriceUS$110.13
SellUS$712,60006 Aug 19
Denise Stump
EntityIndividual
Role
Head of Human Resources
Executive VP of Global Human Resource & Chief Ethics Officer
Shares6,417
Max PriceUS$112.24
SellUS$125,95306 Aug 19
Stephen Johnson
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,145
Max PriceUS$110.01
SellUS$828,96306 Aug 19
Adam Hanft
EntityIndividual
Role
Member of the Board of Directors
Director
Shares7,500
Max PriceUS$111.15
SellUS$1,262,88906 Aug 19
Michael Lukemire
EntityIndividual
Role
President
President & COO
Shares11,443
Max PriceUS$111.39
SellUS$1,071,71006 Aug 19
Thomas Coleman
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares9,547
Max PriceUS$112.26
SellUS$282,50006 Aug 19
Nancy Mistretta
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,500
Max PriceUS$113.00
SellUS$19,971,32305 Aug 19
Hagedorn Partnership LP
EntityCompany
Shares182,649
Max PriceUS$110.49
SellUS$197,39706 Feb 19
Katherine Littlefield
EntityIndividual
Role
Vice Chairman
Vice-Chairman of the Board
Shares2,665
Max PriceUS$74.07

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Jim Hagedorn (64yo)

    CEO & Chairman of the Board

    • Tenure: 18.7yrs
    • Compensation: US$7.92m
  • Denise Stump (65yo)

    Executive VP of Global Human Resource & Chief Ethics Officer

    • Tenure: 16.9yrs
    • Compensation: US$2.13m
  • Jim King (56yo)

    Chief Communications Officer

    • Mike Lukemire (61yo)

      President & COO

      • Tenure: 3.9yrs
      • Compensation: US$3.37m
    • Dave Swihart

      Senior Vice President of Research & Development

      • Tenure: 11.6yrs
    • Phil Jones

      Senior Vice President of International Sales

      • Tenure: 5yrs
    • Scott Hendrick

      Senior Vice President of Global Supply Chain

      • Tenure: 8.9yrs
    • Randy Coleman (50yo)

      Executive VP & CFO

      • Tenure: 5.8yrs
      • Compensation: US$3.03m
    • Ivan Smith (50yo)

      Executive VP

      • Tenure: 6.5yrs
      • Compensation: US$1.72m
    • Mike Hoover

      Senior Vice President of Special Operating Forces


      Board Members

      • Tom Kelly (71yo)

        Independent Director

        • Tenure: 13.4yrs
        • Compensation: US$285.03k
      • Jim McCann (68yo)

        Independent Director

        • Tenure: 6yrs
        • Compensation: US$285.03k
      • Jim Hagedorn (64yo)

        CEO & Chairman of the Board

        • Tenure: 18.7yrs
        • Compensation: US$7.92m
      • Katherine Littlefield (64yo)

        Vice-Chairman of the Board

        • Tenure: 7yrs
        • Compensation: US$285.03k
      • Adam Hanft (69yo)

        Director

        • Tenure: 10yrs
        • Compensation: US$285.03k
      • Nancy Mistretta (65yo)

        Independent Director

        • Tenure: 12.4yrs
        • Compensation: US$285.03k
      • Steve Johnson (68yo)

        Independent Director

        • Tenure: 9.2yrs
        • Compensation: US$285.03k
      • Dave Evans (56yo)

        Independent Director

        • Tenure: 1.8yrs
        • Compensation: US$285.03k
      • John Vines (70yo)

        Lead Independent Director

        • Tenure: 6yrs
        • Compensation: US$335.05k
      • Peter Shumlin (63yo)

        Independent Director

        • Tenure: 3yrs
        • Compensation: US$285.03k

      Company Information

      The Scotts Miracle-Gro Company's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: The Scotts Miracle-Gro Company
      • Ticker: SMG
      • Exchange: NYSE
      • Founded: 1868
      • Industry: Fertilizers and Agricultural Chemicals
      • Sector: Materials
      • Market Cap: US$6.232b
      • Shares outstanding: 55.82m
      • Website: https://www.scotts.com

      Number of Employees


      Location

      • The Scotts Miracle-Gro Company
      • 14111 Scottslawn Road
      • Marysville
      • Ohio
      • 43041
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      SMGNYSE (New York Stock Exchange)YesCommon SharesUSUSDJan 1992
      SCQADB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1992
      0L45LSE (London Stock Exchange)YesCommon SharesGBUSDJan 1992

      Biography

      The Scotts Miracle-Gro Company manufactures, markets, and sells consumer lawn and garden products in the United States and internationally. The company operates through three segments: U.S. Consumer, Hawthorne, and Other. It offers lawn care products, such as lawn fertilizers, grass seed products, spreaders, other durable products, and outdoor cleaners, as well as lawn-related weed, pest, and disease control products. The company also provides gardening and landscape products, including water-soluble and continuous-release plant foods, potting mixes and garden soils, mulch and decorative groundcover products, plant-related pest and disease control products, organic garden products, and lives goods and seeding solutions. In addition, it offers hydroponic products that help users grow plants, flowers, and vegetables in an indoor or urban environment; and insect control products, rodent control products, and weed control products for home areas. The company offers its products under the Scotts, Turf Builder, EZ Seed, PatchMaster, Thick’R Lawn, GrubEx, EdgeGuard, Handy Green II, Scotts OxiCleanTM3, Miracle-Gro, LiquaFeed, Osmocote, Shake ‘N Feed, Hyponex, Earthgro, SuperSoil, Fafard, Nature Scapes, Ortho, Miracle-Gro Organic Choice, Nature’s Care, Whitney Farms, EcoScraps, Gro-ables, Hydroponics, Gavita, Botanicare, Vermicrop, Agrolux, Can-Filters, Sun System, Gro Pro, Mother Earth, Hurricane, Grower's Edge, AeroGarden, Ortho Weed B Gon, Tomcat, Roundup, and Groundclear brands. It serves home centers, mass merchandisers, warehouse clubs, large hardware chains, independent hardware stores, nurseries, garden centers, e-commerce platforms, food and drug stores, and indoor gardening and hydroponic distributors and retailers through a direct sales force, and network of brokers and distributors. The Scotts Miracle-Gro Company was founded in 1868 and is headquartered in Marysville, Ohio. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/19 23:47
      End of Day Share Price2020/01/17 00:00
      Earnings2019/09/30
      Annual Earnings2019/09/30


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.