Scotts Miracle-Gro Co Receives Mixed Ratings from Analysts

The report highlights Scotts Miracle-Gro Co's mixed performance with a 70% rating based on the Shareholder Yield Investor model, indicating significant interest. However, it raised concerns over net payout yield and valuation, potentially impacting its stock market performance.

Date: 01-10-2024

AI Rating: 5

Scotts Miracle-Gro Co (SMG) has been rated 70% based on the Shareholder Yield Investor strategy, reflecting its fundamental strength and stock valuation at moderate levels. However, this rating also indicates that the stock does not meet all criteria associated with the strategy, leading to mixed sentiments among investors.

The report highlights several critical factors:

Universe: Pass - This indicates that the stock is within an acceptable group of companies assessed by the strategy.
Net Payout Yield: Fail - A failure in this area could suggest that the company is not returning sufficient cash to shareholders through dividends or share buybacks, which may deter potential investors looking for strong shareholder returns.
Quality and Debt: Pass - The company maintains a good quality score with manageable debt levels, which is a positive sign for investors concerned about financial stability.
Valuation: Fail - A failure in valuation suggests that the stock may be overvalued at current prices, which could lead to a decline in stock prices if the market adjusts for this discrepancy.
Relative Strength: Pass - The stock has maintained relative strength, indicating that it is performing well compared to its peers, a positive indicator for current investors.
Shareholder Yield: Fail - This further reiterates concerns about how much value the company is returning to its shareholders, sending mixed signals about its attractiveness as an investment opportunity.

The cumulative impact of these assessments indicates an overall cautious approach toward SMG's stock. While it has significant strengths, the failure in crucial areas like net payout yield and valuation could lead to downward pressure on stock prices if investor sentiment turns negative.

Stocks: SMG