SCOTTS MIRACLE-GRO CO (SMG) Stock Fundamental Analysis
NYSE:SMG - New York Stock Exchange, Inc. - US8101861065 - Common Stock - Currency: USD
Overall SMG gets a fundamental rating of 4 out of 10. We evaluated SMG against 85 industry peers in the Chemicals industry. While SMG is still in line with the averages on profitability rating, there are concerns on its financial health. SMG is not valued too expensively and it also shows a decent growth rate. SMG also has an excellent dividend rating.
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.
The reported net income has been mixed in the past 5 years: SMG reported negative net income in multiple years.
SMG had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With a Return On Assets value of 1.02%, SMG perfoms like the industry average, outperforming 51.76% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 12.51%, SMG belongs to the top of the industry, outperforming 91.76% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for SMG is above the industry average of 7.03%.
The 3 year average ROIC (10.63%) for SMG is below the current ROIC(12.51%), indicating increased profibility in the last year.
| 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
SMG has a Profit Margin (1.04%) which is comparable to the rest of the industry.
SMG has a Operating Margin of 11.57%. This is in the better half of the industry: SMG outperforms 64.71% of its industry peers.
In the last couple of years the Operating Margin of SMG has declined.
With a Gross Margin value of 28.78%, SMG perfoms like the industry average, outperforming 54.12% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SMG is still creating some value.
Compared to 1 year ago, SMG has more shares outstanding
Compared to 5 years ago, SMG has more shares outstanding
The debt/assets ratio for SMG is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.28 indicates that SMG is not a great score, but indicates only limited risk for bankruptcy at the moment.
SMG's Altman-Z score of 2.28 is fine compared to the rest of the industry. SMG outperforms 62.35% of its industry peers.
The Debt to FCF ratio of SMG is 6.67, which is on the high side as it means it would take SMG, 6.67 years of fcf income to pay off all of its debts.
SMG has a better Debt to FCF ratio (6.67) than 69.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6.67 | ||
| Altman-Z | 2.28 |
ROIC/WACC1.4
WACC8.95%
2.3 Liquidity
A Current Ratio of 1.71 indicates that SMG should not have too much problems paying its short term obligations.
SMG's Current ratio of 1.71 is on the low side compared to the rest of the industry. SMG is outperformed by 61.18% of its industry peers.
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's Quick ratio of 0.94 is on the low side compared to the rest of the industry. SMG is outperformed by 67.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.71 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
SMG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 382.81%, which is quite impressive.
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.
Looking at the last year, SMG shows a small growth in Revenue. The Revenue has grown by 0.75% in the last year.
Measured over the past years, SMG shows a small growth in Revenue. The Revenue has been growing by 2.40% on average per year.
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
SMG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 28.10% yearly.
The Revenue is expected to grow by 2.57% on average over the next years.
EPS Next Y56.14%
EPS Next 2Y37.83%
EPS Next 3Y31.96%
EPS Next 5Y28.1%
Revenue Next Year-2.99%
Revenue Next 2Y-0.57%
Revenue Next 3Y0.31%
Revenue Next 5Y2.57%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
With a Price/Earnings ratio of 19.28, SMG is valued on the expensive side.
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 (26.25), we can say SMG is valued slightly cheaper.
A Price/Forward Earnings ratio of 14.00 indicates a correct valuation of SMG.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SMG is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 22.15. SMG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.28 | ||
| Fwd PE | 14 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SMG is on the same level as its industry peers.
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 | 9 | ||
| EV/EBITDA | 12.49 |
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 31.96% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.34
PEG (5Y)N/A
EPS Next 2Y37.83%
EPS Next 3Y31.96%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.33%, SMG is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.76, SMG pays a better dividend. On top of this SMG pays more dividend than 84.71% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, SMG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.33% |
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
SMG pays out 424.10% of its income as dividend. This is not a sustainable payout ratio.
SMG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP424.1%
EPS Next 2Y37.83%
EPS Next 3Y31.96%
59.56
-1.35 (-2.22%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners74.87%
Inst Owner Change0.97%
Ins Owners0.55%
Ins Owner Change-0.28%
Market Cap3.44B
Analysts80
Price Target68.51 (15.03%)
Short Float %8.05%
Short Ratio2.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.33% |
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)-4.24%
PT rev (3m)-12.77%
EPS NQ rev (1m)1.59%
EPS NQ rev (3m)2.34%
EPS NY rev (1m)3.62%
EPS NY rev (3m)2.85%
Revenue NQ rev (1m)0.65%
Revenue NQ rev (3m)1.06%
Revenue NY rev (1m)-3.15%
Revenue NY rev (3m)-3.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.28 | ||
| Fwd PE | 14 | ||
| P/S | 1 | ||
| P/FCF | 9 | ||
| P/OCF | 7.65 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.49 |
EPS(TTM)3.09
EY5.19%
EPS(NY)4.26
Fwd EY7.14%
FCF(TTM)6.62
FCFY11.11%
OCF(TTM)7.78
OCFY13.07%
SpS59.85
BVpS-5.03
TBVpS-16.39
PEG (NY)0.34
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 | 2.28 |
F-Score7
WACC8.95%
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 Y56.14%
EPS Next 2Y37.83%
EPS Next 3Y31.96%
EPS Next 5Y28.1%
Revenue 1Y (TTM)0.75%
Revenue growth 3Y-10.32%
Revenue growth 5Y2.4%
Sales Q2Q%-6.84%
Revenue Next Year-2.99%
Revenue Next 2Y-0.57%
Revenue Next 3Y0.31%
Revenue Next 5Y2.57%
EBIT growth 1Y55.55%
EBIT growth 3Y-22.13%
EBIT growth 5Y-3.01%
EBIT Next Year59.4%
EBIT Next 3Y22.62%
EBIT Next 5Y19.78%
FCF growth 1Y9.93%
FCF growth 3Y52.48%
FCF growth 5Y25.91%
OCF growth 1Y0.58%
OCF growth 3Y34.97%
OCF growth 5Y24.1%