Best Retirement Stocks: Scotts Miracle-Gro (SMG)
Dividend Yield: 2.2%
If you have a great-looking lawn at home, it’s probably in part because you or your gardener use one or more products made by Scotts Miracle-Gro Co (NYSE:SMG), an Ohio company that specializes in lawn and garden products.
Fiscal 2016 was a transformational year for Scotts. It undertook Project Focus, a group of initiatives meant to extract value from its non-core assets while doubling down on its U.S. lawn and garden business. Since SMG announced the plan in December 2015, its stock is up 37%.
“I have no beef with the recent performance of the company,” Scotts CEO Jim Hagedorn said announcing Project Focus. “The changes we’re making have little to do with near-term performance. It’s about securing our long-term future.”
Over the past five years, Scotts Miracle-Gro has increased its adjusted income from continuing operations from $104.7 million in fiscal 2012 to $241.1 million in fiscal 2016. In Q1 2017, Scotts Miracle Gro increased revenues by 27% year-over-year while reducing its non-GAAP pro forma loss to 95 cents per share, from $1.13 in the year-ago period.
Don’t be alarmed by the losses, by the way — Scotts traditionally loses money in the first quarter. In fact, despite that Q1 loss in 2016, SMG nearly doubled its profits for the full year, to $315.3 million.
Scotts Miracle-Gro will continue to do well as long as people have lawns that need maintaining. That’s a long time.