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 correct valuation and a medium growth rate. Finally SMG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
SMG had positive earnings in the past year.
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.
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 comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 12.51%, SMG belongs to the top of the industry, outperforming 94.12% 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 6.66%.
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
Looking at the Profit Margin, with a value of 1.04%, SMG is in line with its industry, outperforming 51.76% of the companies in the same 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.
In the last couple of years the Operating Margin of SMG has declined.
Looking at the Gross Margin, with a value of 28.78%, SMG is in line with its industry, outperforming 55.29% of the companies in the same industry.
In the last couple of years the Gross Margin of SMG has declined.
| 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.
Compared to 1 year ago, SMG has more shares outstanding
SMG has more shares outstanding than it did 5 years ago.
SMG has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.27 indicates that SMG is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.27, SMG is in the better half of the industry, outperforming 67.06% of the companies in the same industry.
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.
The Debt to FCF ratio of SMG (6.67) is better than 71.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6.67 | ||
| Altman-Z | 2.27 |
ROIC/WACC1.39
WACC8.98%
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.
The Current ratio of SMG (1.71) is worse than 61.18% of its industry peers.
A Quick Ratio of 0.94 indicates that SMG may have some problems paying its short term obligations.
With a Quick ratio value of 0.94, SMG is not doing good in the industry: 69.41% of the companies in the same industry are doing better.
| 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 89.33% over the past year.
SMG shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -12.83% yearly.
SMG shows a decrease in Revenue. In the last year, the revenue decreased by -2.05%.
SMG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.40% yearly.
EPS 1Y (TTM)89.33%
EPS 3Y-37.53%
EPS 5Y-12.83%
EPS Q2Q%12.12%
Revenue 1Y (TTM)-2.05%
Revenue growth 3Y-10.32%
Revenue growth 5Y2.4%
Sales Q2Q%-1.18%
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.
The Revenue is expected to grow by 0.65% on average over the next years.
EPS Next Y59.93%
EPS Next 2Y39.1%
EPS Next 3Y32.31%
EPS Next 5Y25.19%
Revenue Next Year-2.96%
Revenue Next 2Y-0.48%
Revenue Next 3Y0.4%
Revenue Next 5Y0.65%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 17.34, SMG is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of SMG indicates a somewhat cheap valuation: SMG is cheaper than 61.18% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.48, SMG is valued a bit cheaper.
With a Price/Forward Earnings ratio of 13.49, SMG is valued correctly.
The rest of the industry has a similar Price/Forward Earnings ratio as SMG.
The average S&P500 Price/Forward Earnings ratio is at 34.04. SMG is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.34 | ||
| Fwd PE | 13.49 |
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.
87.06% of the companies in the same industry are more expensive than SMG, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.83 | ||
| EV/EBITDA | 12.36 |
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)0.29
PEG (5Y)N/A
EPS Next 2Y39.1%
EPS Next 3Y32.31%
5. Dividend
5.1 Amount
SMG has a Yearly Dividend Yield of 4.40%, which is a nice return.
SMG's Dividend Yield is rather good when compared to the industry average which is at 3.76. SMG pays more dividend than 83.53% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, SMG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.4% |
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.
SMG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP424.1%
EPS Next 2Y39.1%
EPS Next 3Y32.31%
58.45
-1.52 (-2.53%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners74.67%
Inst Owner Change-0.27%
Ins Owners0.55%
Ins Owner Change-0.48%
Market Cap3.37B
Analysts77.14
Price Target77.18 (32.04%)
Short Float %9.58%
Short Ratio4.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.4% |
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)5.83%
PT rev (3m)12.66%
EPS NQ rev (1m)0.06%
EPS NQ rev (3m)1.56%
EPS NY rev (1m)0%
EPS NY rev (3m)6.13%
Revenue NQ rev (1m)-0.16%
Revenue NQ rev (3m)-0.32%
Revenue NY rev (1m)-0.17%
Revenue NY rev (3m)0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.34 | ||
| Fwd PE | 13.49 | ||
| P/S | 0.98 | ||
| P/FCF | 8.83 | ||
| P/OCF | 7.51 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.36 |
EPS(TTM)3.37
EY5.77%
EPS(NY)4.33
Fwd EY7.42%
FCF(TTM)6.62
FCFY11.32%
OCF(TTM)7.78
OCFY13.32%
SpS59.85
BVpS-5.03
TBVpS-16.39
PEG (NY)0.29
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 | 2.27 |
F-Score7
WACC8.98%
ROIC/WACC1.39
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)89.33%
EPS 3Y-37.53%
EPS 5Y-12.83%
EPS Q2Q%12.12%
EPS Next Y59.93%
EPS Next 2Y39.1%
EPS Next 3Y32.31%
EPS Next 5Y25.19%
Revenue 1Y (TTM)-2.05%
Revenue growth 3Y-10.32%
Revenue growth 5Y2.4%
Sales Q2Q%-1.18%
Revenue Next Year-2.96%
Revenue Next 2Y-0.48%
Revenue Next 3Y0.4%
Revenue Next 5Y0.65%
EBIT growth 1Y55.55%
EBIT growth 3Y-22.13%
EBIT growth 5Y-3.01%
EBIT Next Year58.86%
EBIT Next 3Y23.69%
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%