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The Scotts Miracle-Gro Company logo

The Scotts Miracle-Gro Company

SMG
64
Agricultural Inputs · Basic Materials
Price
$70.98
-2.49 (-3.39%)
Market Cap
$4.13B
Winston Score
64
Winston is curious
A decent business — some strong pillars, some weaker.

Share count rising — dilution

+2.6% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 57.2M (2021) → 58.7M (2025)

Scotts Miracle-Gro makes lawn and garden products that everyday consumers use to grow grass, flowers, and vegetables at home. Its most recognized brands include Scotts lawn fertilizers, Miracle-Gro potting soil and plant food, and Ortho pest control products. The company also owns Hawthorne Gardening, which sells growing equipment and nutrients to indoor and hydroponic growers.

The company earns most of its revenue by selling branded consumer products through large retailers like Home Depot, Lowe's, and Walmart, making it heavily dependent on a small number of retail partners. It operates primarily in the United States, with some presence in Europe and other markets. Scotts holds strong brand recognition in a category where consumers tend to trust familiar names, which gives it some pricing power. The biggest risk the company faces is its Hawthorne segment, which struggled significantly as demand from cannabis growers collapsed after a period of rapid expansion.

Winston Score History

Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+2.7% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+8.7% YoY

YoY Growth Rate

Slow EPS growth

R&D Spend

$35M/ year

Flat (+1% vs prior year)

1.0% of revenue

Below sector average (3%)

Steady R&D investment year-over-year

Insider Activity

23.6%ownership

Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$6M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

The Scotts Miracle-Gro Company is growing revenue at 3% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin
41.8%
Healthy — 41.8% gross margin
Operating Margin
28.2%
Excellent — 28.2% operating margin
ROCE
20.0%
Strong — 20.0% return on capital

ROIC between 15% and 25%. Every dollar invested in the business earns 15 to 25 cents back per year.

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Growth

Sales YoY
+27.4%
Fast-growing sales (27.4% YoY)
EPS YoY
N/A
Data not available
EPS Consistency
6/8 quarters
Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion
229%
Turns 229% of profit into real cash
FCF Margin
21.3%
Converts sales into free cash efficiently (21.3%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity
N/A
Data not available
Interest Cover
6.49x
Adequate interest coverage (6.5x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)
9.1x
Attractive valuation — P/E 9.1

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward
-3.9
SLOWING
Earnings expected to fall — forward P/E higher than today

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Dividends

Dividend Yield
3.90%
Moderate income — 3.90% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth
+0.0%
Dividend flat

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