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Scotts Miracle-Gro (SMG) has increased its dividend for 12 consecutive years. This company is, in my opinion, being ingeniously positioned for the future. This is a company that was originally founded in 1868 – we’re talking more than 150 years of history here. They’ve taken a solid but old-school foundation, then built upon that with new economy product offerings in a very synergistic fashion.
The 10-year dividend growth rate is 12.3%. That double-digit dividend growth rate is impressive, although it’s trailed bottom-line growth over the same time frame. This has created a situation where the payout ratio has actually compressed, unlike quite a few other companies out there that have expanded their payout ratios.
The payout ratio is currently at only 30.3%, based on midpoint guidance for this fiscal year’s adjusted EPS. That leaves a lot of room for a lot of sizable dividend raises in the future. And the stock even yields a respectable 1.7% here.
It’s down nearly 40% from its 52-week high. At $150/share range, I see it as reasonably valued.
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