Scotts Miracle-Gro Company (NYSE:SMG) is set to pay a $0.66 per share dividend on December 8, offering a yield of 4.9%. The firm's strong free cash flows, indicative of financial stability, more than cover the dividend and provide ample room for business reinvestment.
Despite the company's non-profitability, a significant increase in earnings per share is projected for the next year. This could potentially lead to a sustainable payout ratio of 29%. Since 2013, Scotts Miracle-Gro has maintained a reliable dividend history with a compound annual growth rate (CAGR) of 7.3%, demonstrating its commitment to shareholder returns.
However, the company has experienced a 38% drop in earnings over the past five years, which could put future dividends under pressure unless earnings rebound. While cash generation remains robust, the high dividend yield may deter income-focused investors. These factors, combined with other potential warning signs, are critical considerations for potential investors.
InvestingPro Insights
According to InvestingPro, Scotts Miracle-Gro Company has shown a significant return over the last week and month. This aligns with the InvestingPro Tip that the company's stock price movements can be quite volatile. Nevertheless, the company has maintained dividend payments for 19 consecutive years, further solidifying its commitment to shareholders.
InvestingPro's real-time data provides additional insights. As of the last twelve months ending Q4 2023, the company's Market Cap is 3050M USD. Despite a negative P/E ratio of -7.99, the company's revenue stands at 3551.3M (NYSE:MMM) USD. Furthermore, the company's dividend yield as of August 2023 was 4.86%, aligning with the article's focus on dividend payments.
InvestingPro offers more invaluable tips and real-time data metrics for those interested in making informed investment decisions. For instance, for Scotts Miracle-Gro Company alone, InvestingPro provides 8 additional tips and over 20 real-time data metrics. This comprehensive data set can help potential investors make more informed decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.