SCOTTS MIRACLE-GRO CO (SMG) Stock Fundamental Analysis
NYSE:SMG - New York Stock Exchange, Inc. - US8101861065 - Common Stock - Currency: USD
Taking everything into account, SMG scores 4 out of 10 in our fundamental rating. SMG was compared to 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 is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year SMG was profitable.
In the past year SMG had a positive cash flow from operations.
In multiple years SMG reported negative net income over the last 5 years.
Of the past 5 years SMG 4 years had a positive operating cash flow.
1.2 Ratios
SMG has a Return On Assets (1.02%) which is in line with its industry peers.
SMG has a better Return On Invested Capital (12.51%) than 91.76% 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 6.84%.
The last Return On Invested Capital (12.51%) for SMG is above the 3 year average (10.63%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.02% | ||
| ROE | N/A | ||
| ROIC | 12.51% |
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 Profit Margin of SMG (1.04%) is comparable to the rest of the industry.
Looking at the Operating Margin, with a value of 11.57%, SMG is in the better half of the industry, outperforming 64.71% of the companies in the same industry.
SMG's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 28.78%, SMG perfoms like the industry average, outperforming 55.29% of the companies in the same industry.
SMG's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.57% | ||
| PM (TTM) | 1.04% | ||
| GM | 28.78% |
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
SMG has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for SMG has been increased compared to 1 year ago.
Compared to 5 years ago, SMG has more shares outstanding
Compared to 1 year ago, SMG has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.37 indicates that SMG is not a great score, but indicates only limited risk for bankruptcy at the moment.
SMG has a better Altman-Z score (2.37) than 65.88% of its industry peers.
SMG has a debt to FCF ratio of 6.67. This is a slightly negative value and a sign of low solvency as SMG would need 6.67 years to pay back of all of its debts.
SMG has a Debt to FCF ratio of 6.67. This is in the better half of the industry: SMG outperforms 70.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6.67 | ||
| Altman-Z | 2.37 |
ROIC/WACC1.4
WACC8.93%
2.3 Liquidity
SMG has a Current Ratio of 1.71. This is a normal value and indicates that SMG is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.71, SMG is not doing good in the industry: 62.35% of the companies in the same industry are doing better.
SMG has a Quick Ratio of 1.71. This is a bad value and indicates that SMG is not financially healthy enough and could expect problems in meeting its short term obligations.
SMG has a Quick ratio of 0.94. This is in the lower half of the industry: SMG underperforms 68.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.71 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 382.81% 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 0.75%.
The Revenue has been growing slightly by 2.40% on average over the past years.
EPS 1Y (TTM)382.81%
EPS 3Y-37.53%
EPS 5Y-12.83%
EPS Q2Q%7.86%
Revenue 1Y (TTM)0.75%
Revenue growth 3Y-10.32%
Revenue growth 5Y2.4%
Sales Q2Q%-6.84%
3.2 Future
Based on estimates for the next years, SMG will show a very strong growth in Earnings Per Share. The EPS will grow by 25.19% on average per year.
SMG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.65% yearly.
EPS Next Y59.93%
EPS Next 2Y39.1%
EPS Next 3Y32.31%
EPS Next 5Y25.19%
Revenue Next Year-2.8%
Revenue Next 2Y-0.45%
Revenue Next 3Y0.44%
Revenue Next 5Y0.65%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 22.43 indicates a rather expensive valuation of SMG.
SMG's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of SMG to the average of the S&P500 Index (27.30), we can say SMG is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 15.99, the valuation of SMG can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SMG is on the same level as its industry peers.
SMG's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.43 | ||
| Fwd PE | 15.99 |
4.2 Price Multiples
SMG's Enterprise Value to EBITDA is on the same level as the industry average.
SMG's Price/Free Cash Flow ratio is rather cheap when compared to the industry. SMG is cheaper than 89.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.48 | ||
| EV/EBITDA | 13.67 |
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.
A more expensive valuation may be justified as SMG's earnings are expected to grow with 32.31% in the coming years.
PEG (NY)0.37
PEG (5Y)N/A
EPS Next 2Y39.1%
EPS Next 3Y32.31%
5. Dividend
5.1 Amount
SMG has a Yearly Dividend Yield of 3.80%. Purely for dividend investing, there may be better candidates out there.
SMG's Dividend Yield is rather good when compared to the industry average which is at 3.53. SMG pays more dividend than 83.53% of the companies in the same industry.
SMG's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.8% |
5.2 History
The dividend of SMG has a limited annual growth rate of 3.51%.
SMG has paid a dividend for at least 10 years, which is 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
424.10% of the earnings are spent on dividend by SMG. This is not a sustainable payout ratio.
The dividend of SMG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP424.1%
EPS Next 2Y39.1%
EPS Next 3Y32.31%
69.31
-0.1 (-0.14%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners73.97%
Inst Owner Change0%
Ins Owners0.55%
Ins Owner Change-0.17%
Market Cap4.00B
Analysts77.14
Price Target72.93 (5.22%)
Short Float %10.01%
Short Ratio3.43
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.8% |
Yearly Dividend2.66
Dividend Growth(5Y)3.51%
DP424.1%
Div Incr Years0
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)14.09%
Min EPS beat(2)-0.27%
Max EPS beat(2)28.45%
EPS beat(4)2
Avg EPS beat(4)7.53%
Min EPS beat(4)-16.32%
Max EPS beat(4)28.45%
EPS beat(8)5
Avg EPS beat(8)3.55%
EPS beat(12)8
Avg EPS beat(12)6.26%
EPS beat(16)11
Avg EPS beat(16)4.88%
Revenue beat(2)1
Avg Revenue beat(2)-0.42%
Min Revenue beat(2)-6.02%
Max Revenue beat(2)5.18%
Revenue beat(4)2
Avg Revenue beat(4)0.31%
Min Revenue beat(4)-6.02%
Max Revenue beat(4)5.18%
Revenue beat(8)4
Avg Revenue beat(8)0.98%
Revenue beat(12)5
Avg Revenue beat(12)-0.4%
Revenue beat(16)7
Avg Revenue beat(16)0.56%
PT rev (1m)5.93%
PT rev (3m)-5.74%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.88%
EPS NY rev (1m)2.43%
EPS NY rev (3m)6.1%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.73%
Revenue NY rev (1m)0.2%
Revenue NY rev (3m)-2.96%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.43 | ||
| Fwd PE | 15.99 | ||
| P/S | 1.16 | ||
| P/FCF | 10.48 | ||
| P/OCF | 8.9 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.67 |
EPS(TTM)3.09
EY4.46%
EPS(NY)4.33
Fwd EY6.25%
FCF(TTM)6.62
FCFY9.55%
OCF(TTM)7.78
OCFY11.23%
SpS59.85
BVpS-5.03
TBVpS-16.39
PEG (NY)0.37
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.02% | ||
| ROE | N/A | ||
| ROCE | 15.83% | ||
| ROIC | 12.51% | ||
| ROICexc | 12.59% | ||
| ROICexgc | 17.05% | ||
| OM | 11.57% | ||
| PM (TTM) | 1.04% | ||
| GM | 28.78% | ||
| FCFM | 11.05% |
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-Score7
Asset Turnover0.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6.67 | ||
| Debt/EBITDA | 5.22 | ||
| Cap/Depr | 86.08% | ||
| Cap/Sales | 1.95% | ||
| Interest Coverage | 2.81 | ||
| Cash Conversion | 94.02% | ||
| Profit Quality | 1057.89% | ||
| Current Ratio | 1.71 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | 2.37 |
F-Score7
WACC8.93%
ROIC/WACC1.4
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)382.81%
EPS 3Y-37.53%
EPS 5Y-12.83%
EPS Q2Q%7.86%
EPS Next Y59.93%
EPS Next 2Y39.1%
EPS Next 3Y32.31%
EPS Next 5Y25.19%
Revenue 1Y (TTM)0.75%
Revenue growth 3Y-10.32%
Revenue growth 5Y2.4%
Sales Q2Q%-6.84%
Revenue Next Year-2.8%
Revenue Next 2Y-0.45%
Revenue Next 3Y0.44%
Revenue Next 5Y0.65%
EBIT growth 1Y55.55%
EBIT growth 3Y-22.13%
EBIT growth 5Y-3.01%
EBIT Next Year59.4%
EBIT Next 3Y22.62%
EBIT Next 5Y17.45%
FCF growth 1Y9.93%
FCF growth 3Y52.48%
FCF growth 5Y25.91%
OCF growth 1Y0.58%
OCF growth 3Y34.97%
OCF growth 5Y24.1%