Scotts Miracle-Gro: "Growing Like a Weed"

07/20/2016 7:00 am EST

Focus: STOCKS

Mark Skousen

Editor, Forecasts & Strategies, High-Income Alert

With extremely low interest rates, a continuation of the Fed’s easy-money policies, and tepid economic growth, the stock market remains attractive, states Mark Skousen, editor of Five Star Trader Alert.

The latest new recommendation that fits our criteria is Scotts Miracle-Gro (SMG), the Ohio-based manufacturer and seller of lawn and garden products, especially Miracle-Gro.

It is the world’s largest lawn product company, with 88 company locations and 94 independent franchisees.

The company is growing like a weed and the stock recently hit an all-time high. Scotts is adding new products all the time. 

Annual revenues are up 16% to $3.2 billion, and earnings are growing even faster, up 69% to $243 million. It beat estimates in its most recent earnings report in early May.

Scotts has a great reputation, and is ranked on Forbes’ Annual 100 Most Reputable Companies in America. It also enjoys a rising dividend policy, and usually increases its dividend once a year. 

The stock has already rallied 7% since we added it to our portfolio. I believe investors see SMG as an undervalued growth stock that is still selling for only 17 times expected 2016 earnings.

It once again hit an all-time high, with annual revenues advancing and earnings climbing 69%. It beat estimates in its most recent earnings report in early May

Currently, Scotts is paying 47 cents per share each quarter, or $1.88 a year, to earn almost $4 a share. So, there’s plenty of opportunity to pay out more when it reports earnings in early August.

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By Mark Skousen, Editor of Five Star Trader Alert

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