SCOTTS MIRACLE-GRO CO (SMG) Stock Fundamental Analysis
NYSE:SMG - New York Stock Exchange, Inc. - US8101861065 - Common Stock - Currency: USD
SMG gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 85 industry peers in the Chemicals industry. There are concerns on the financial health of SMG while its profitability can be described as average. SMG has a decent growth rate and is not valued too expensively. SMG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year SMG was profitable.
SMG had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: SMG reported negative net income in multiple years.
Of the past 5 years SMG 4 years had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of -0.75%, SMG is doing worse than 69.88% of the companies in the same industry.
The Return On Invested Capital of SMG (12.26%) is better than 92.77% of its industry peers.
SMG had an Average Return On Invested Capital over the past 3 years of 10.63%. This is above the industry average of 6.65%.
The last Return On Invested Capital (12.26%) for SMG is above the 3 year average (10.63%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.75% | ||
| ROE | N/A | ||
| ROIC | 12.26% |
ROA(3y)-7.51%
ROA(5y)-0.08%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)10.63%
ROIC(5y)13.54%
1.3 Margins
The Operating Margin of SMG (10.85%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of SMG has declined.
The Gross Margin of SMG (27.46%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of SMG has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.85% | ||
| PM (TTM) | N/A | ||
| GM | 27.46% |
OM growth 3Y-13.17%
OM growth 5Y-5.28%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-4.65%
GM growth 5Y-4.15%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SMG is creating some value.
The number of shares outstanding for SMG has been increased compared to 1 year ago.
SMG has more shares outstanding than it did 5 years ago.
The debt/assets ratio for SMG is higher compared to a year ago.
2.2 Solvency
SMG has an Altman-Z score of 2.43. This is not the best score and indicates that SMG is in the grey zone with still only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.43, SMG is doing good in the industry, outperforming 67.47% of the companies in the same industry.
The Debt to FCF ratio of SMG is 5.49, which is a neutral value as it means it would take SMG, 5.49 years of fcf income to pay off all of its debts.
SMG's Debt to FCF ratio of 5.49 is fine compared to the rest of the industry. SMG outperforms 73.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.49 | ||
| Altman-Z | 2.43 |
ROIC/WACC1.38
WACC8.89%
2.3 Liquidity
A Current Ratio of 1.88 indicates that SMG should not have too much problems paying its short term obligations.
SMG has a Current ratio (1.88) which is comparable to the rest of the industry.
SMG has a Quick Ratio of 1.88. This is a bad value and indicates that SMG is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of SMG (0.55) is worse than 90.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.88 | ||
| Quick Ratio | 0.55 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 283.56% over the past year.
Measured over the past years, SMG shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -12.83% on average per year.
SMG shows a small growth in Revenue. In the last year, the Revenue has grown by 3.61%.
The Revenue has been growing slightly by 2.40% on average over the past years.
EPS 1Y (TTM)283.56%
EPS 3Y-37.53%
EPS 5Y-12.83%
EPS Q2Q%38.62%
Revenue 1Y (TTM)3.61%
Revenue growth 3Y-10.32%
Revenue growth 5Y2.4%
Sales Q2Q%1.56%
3.2 Future
The Earnings Per Share is expected to grow by 27.76% on average over the next years. This is a very strong growth
SMG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.80% yearly.
EPS Next Y51.82%
EPS Next 2Y39.39%
EPS Next 3Y31.41%
EPS Next 5Y27.76%
Revenue Next Year0.39%
Revenue Next 2Y1.36%
Revenue Next 3Y1.65%
Revenue Next 5Y2.8%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 21.59, the valuation of SMG can be described as rather expensive.
SMG's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 29.63. SMG is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 13.89, the valuation of SMG can be described as correct.
SMG's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SMG is cheaper than 66.27% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.68. SMG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.59 | ||
| Fwd PE | 13.89 |
4.2 Price Multiples
SMG's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. SMG is more expensive than 60.24% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, SMG is valued cheaply inside the industry as 91.57% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.09 | ||
| EV/EBITDA | 13.53 |
4.3 Compensation for Growth
SMG's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
SMG's earnings are expected to grow with 31.41% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.42
PEG (5Y)N/A
EPS Next 2Y39.39%
EPS Next 3Y31.41%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.20%, SMG is a good candidate for dividend investing.
The stock price of SMG dropped by -22.35% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
SMG's Dividend Yield is rather good when compared to the industry average which is at 3.27. SMG pays more dividend than 84.34% of the companies in the same industry.
SMG's Dividend Yield is rather good when compared to the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.2% |
5.2 History
The dividend of SMG has a limited annual growth rate of 3.51%.
SMG has been paying a dividend for at least 10 years, so it has a reliable track record.
SMG has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)3.51%
Div Incr Years0
Div Non Decr Years3
5.3 Sustainability
The earnings of SMG are negative and hence is the payout ratio. SMG will probably not be able to sustain this dividend level.
SMG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-640.59%
EPS Next 2Y39.39%
EPS Next 3Y31.41%
60.46
-2.45 (-3.89%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners74.87%
Inst Owner Change-1.87%
Ins Owners0.55%
Ins Owner Change-0.5%
Market Cap3.47B
Analysts72.86
Price Target78.54 (29.9%)
Short Float %6.11%
Short Ratio3.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.2% |
Yearly Dividend2.66
Dividend Growth(5Y)3.51%
DP-640.59%
Div Incr Years0
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.06%
Min EPS beat(2)-16.32%
Max EPS beat(2)28.45%
EPS beat(4)3
Avg EPS beat(4)9.46%
Min EPS beat(4)-16.32%
Max EPS beat(4)28.45%
EPS beat(8)6
Avg EPS beat(8)4.62%
EPS beat(12)9
Avg EPS beat(12)6.68%
EPS beat(16)12
Avg EPS beat(16)5.08%
Revenue beat(2)2
Avg Revenue beat(2)3.95%
Min Revenue beat(2)2.71%
Max Revenue beat(2)5.18%
Revenue beat(4)3
Avg Revenue beat(4)2.03%
Min Revenue beat(4)-0.64%
Max Revenue beat(4)5.18%
Revenue beat(8)4
Avg Revenue beat(8)0.99%
Revenue beat(12)5
Avg Revenue beat(12)0.1%
Revenue beat(16)8
Avg Revenue beat(16)1.21%
PT rev (1m)-1.84%
PT rev (3m)-11.71%
EPS NQ rev (1m)1.99%
EPS NQ rev (3m)-3.93%
EPS NY rev (1m)4.34%
EPS NY rev (3m)0.36%
Revenue NQ rev (1m)-1.23%
Revenue NQ rev (3m)-1.81%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.59 | ||
| Fwd PE | 13.89 | ||
| P/S | 0.98 | ||
| P/FCF | 7.09 | ||
| P/OCF | 6.15 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.53 |
EPS(TTM)2.8
EY4.63%
EPS(NY)4.35
Fwd EY7.2%
FCF(TTM)8.53
FCFY14.1%
OCF(TTM)9.84
OCFY16.27%
SpS61.93
BVpS-8.34
TBVpS-19.81
PEG (NY)0.42
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.75% | ||
| ROE | N/A | ||
| ROCE | 15.52% | ||
| ROIC | 12.26% | ||
| ROICexc | 12.31% | ||
| ROICexgc | 16.78% | ||
| OM | 10.85% | ||
| PM (TTM) | N/A | ||
| GM | 27.46% | ||
| FCFM | 13.77% |
ROA(3y)-7.51%
ROA(5y)-0.08%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)10.63%
ROIC(5y)13.54%
ROICexc(3y)10.91%
ROICexc(5y)13.96%
ROICexgc(3y)15.3%
ROICexgc(5y)22.83%
ROCE(3y)13.46%
ROCE(5y)17.14%
ROICexcg growth 3Y-10.58%
ROICexcg growth 5Y-6.7%
ROICexc growth 3Y-7.68%
ROICexc growth 5Y0%
OM growth 3Y-13.17%
OM growth 5Y-5.28%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-4.65%
GM growth 5Y-4.15%
F-Score6
Asset Turnover1.12
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.49 | ||
| Debt/EBITDA | 5.67 | ||
| Cap/Depr | 94.96% | ||
| Cap/Sales | 2.12% | ||
| Interest Coverage | 2.6 | ||
| Cash Conversion | 121.49% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.88 | ||
| Quick Ratio | 0.55 | ||
| Altman-Z | 2.43 |
F-Score6
WACC8.89%
ROIC/WACC1.38
Cap/Depr(3y)104.14%
Cap/Depr(5y)98.52%
Cap/Sales(3y)2.62%
Cap/Sales(5y)2.31%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)283.56%
EPS 3Y-37.53%
EPS 5Y-12.83%
EPS Q2Q%38.62%
EPS Next Y51.82%
EPS Next 2Y39.39%
EPS Next 3Y31.41%
EPS Next 5Y27.76%
Revenue 1Y (TTM)3.61%
Revenue growth 3Y-10.32%
Revenue growth 5Y2.4%
Sales Q2Q%1.56%
Revenue Next Year0.39%
Revenue Next 2Y1.36%
Revenue Next 3Y1.65%
Revenue Next 5Y2.8%
EBIT growth 1Y51.67%
EBIT growth 3Y-22.13%
EBIT growth 5Y-3.01%
EBIT Next Year60.49%
EBIT Next 3Y22.23%
EBIT Next 5Y20.01%
FCF growth 1Y355.81%
FCF growth 3Y52.48%
FCF growth 5Y25.91%
OCF growth 1Y176.48%
OCF growth 3Y34.97%
OCF growth 5Y24.1%