Scotts Miracle-Gro Co (NYSE: SMG)

Sector: Basic Materials Industry: Agricultural Inputs CIK: 0000825542
Market Cap 4.04 Bn
P/B -8.08
P/E 45.09
P/S 1.21
ROIC (Qtr) 18.27
Div Yield % 3.78
Rev 1y % (Qtr) -3.33
Total Debt (Qtr) 2.53 Bn
Debt/Equity (Qtr) -5.05
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About

The Scotts Miracle-Gro Company, often recognized by its stock symbol SMG, is a prominent player in the lawn and garden industry of North America. With a focus on developing, manufacturing, and marketing lawn and garden products, Scotts Miracle-Gro has established itself as a trusted brand among consumers. The company's offerings include fertilizers, grass seeds, and pest control products, marketed under brand names such as Scotts, Miracle-Gro, Ortho, and Tomcat. Scotts Miracle-Gro's products reach consumers through a vast network of retailers, including...

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Investment thesis

Bull case

  • Robust free cash flow of 358.10M exceeds capital expenditure of 88.10M by 4.06x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 2.44B provides 7.51x coverage of working capital 324.80M, indicating strong operational backing.
  • Tangible assets of 2.44B provide robust 6.59x coverage of other current liabilities 370.20M, indicating strong asset backing.
  • Operating cash flow of 446.20M fully covers other non-current liabilities 352M by 1.27x, showing strong long-term stability.
  • Operating cash flow of 446.20M provides strong 6.79x coverage of operating expenses 65.70M, showing operational efficiency.

Bear case

  • Operating cash flow of 446.20M barely covers its investment activities of (110.60M), with a coverage ratio of -4.03, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 8.30M against inventory of 846.70M, the 0.01 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 446.20M provides thin coverage of dividend payments of (153.40M) with a -2.91 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 8.30M provide limited coverage of acquisition spending of (2.50M), which is -3.32x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 358.10M represents just -2.18x of debt issuance (164.40M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Agricultural Inputs
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CTVA Corteva, Inc. 51.66 Bn 47.22 2.97 2.58 Bn
2 NTR Nutrien Ltd. 33.97 Bn 18.78 1.28 14.18 Bn
3 CF CF Industries Holdings, Inc. 24.01 Bn 17.27 5.06 3.40 Bn
4 MOS Mosaic Co 11.47 Bn 12.98 1.20 4.57 Bn
5 ICL ICL Group Ltd. 7.35 Bn 19.93 1.04 2.68 Bn
6 SMG Scotts Miracle-Gro Co 4.04 Bn 45.09 1.21 2.53 Bn
7 FMC Fmc Corp 1.81 Bn 1.37 0.40 4.58 Bn
8 UAN Cvr Partners, Lp 1.13 Bn 13.61 1.94 0.57 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.02 0.81
EV to Cash from Ops. EV/CFO 13.70 10.02
EV to Debt EV to Debt 2.42 10.62
EV to EBIT EV/EBIT 20.42 46.09
EV to EBITDA EV/EBITDA 13.23 7.11
EV to Free Cash Flow [EV/FCF] EV/FCF 17.07 9.01
EV to Market Cap EV to Market Cap 1.51 1.48
EV to Revenue EV/Rev 1.82 1.04
Price to Book Value [P/B] P/B -8.08 0.69
Price to Earnings [P/E] P/E 45.09 13.22
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.58 1.10
Dividend Payout Ratio % Div Payout % (Qtr) 170.30 28.62
Dividend per Basic Share Div per Share (Qtr) 2.64 1.49
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 42.68 2.06
Interest Coverage Int. cover (Qtr) 2.45 3.21
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -16.84 10,378.95
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 45.61 20.72
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 -0.75
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -83.95 -98.96
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 59.58 -212.56
EBIT Growth (1y) % EBIT 1y % (Qtr) 104.72 -25.56
EBT Growth (1y) % EBT 1y % (Qtr) 4,886.49 257.67
EPS Growth (1y) % EPS 1y % (Qtr) 478.05 -169.70
FCF Growth (1y) % FCF 1y % (Qtr) -26.92 -105.41
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 18.40 14.76
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.10 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.29 0.00
Cash Ratio Cash Ratio (Qtr) 0.01 0.66
Current Ratio Curr Ratio (Qtr) 1.35 1.99
Debt to Equity Ratio Debt/Equity (Qtr) -5.05 0.09
Interest Cover Ratio Int Coverage (Qtr) 2.45 3.21
Times Interest Earned Times Interest Earned (Qtr) 2.45 3.21
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 11.20 -162.19
EBIT Margin % EBIT Margin % (Qtr) 8.94 -175.66
EBT Margin % EBT Margin % (Qtr) 5.29 -244.07
Gross Margin % Gross Margin % (Qtr) 31.00 32.49
Net Profit Margin % Net Margin % (Qtr) 2.70 -252.26