Dividend Yield: 3%
OK, Scotts Miracle-Gro Co. (NYSE:SMG) admittedly could use some of its own product, at least as far as earnings are concerned — while annual earnings still are on pace to grow from last year’s numbers, they’re still inconsistent on a quarterly basis and well behind 2009 numbers.
However, SMG’s dividend has been blooming relatively steadily for the few years it’s been in season. The company started paying in 2009 and increased its payout by another 8% to 32 cents in the most recent quarter, bringing the yield just over 3%.
Scotts is in the red so far this year, but there are signs that could pick up. Boyar Intrinsic Value Research head Mark Boyar tells Barron’s that the baby boom favors SMG as older folks tend to garden more. Plus, he says there’s a chance the company could again be taken private, and Scotts’ strong business means shares likely would go at a premium.
The recession has been weighing on the company’s success, as the lawn usually gets second billing when families are pinching pennies. But if consumer spending gets back on track — and recent research suggests it’s poised to — expect people to hit the dirt with Scotts products in hand.