uploads///SMG Valuation Multiple versus Peers

What Investors Are Paying for Scotts Miracle-Gro


Nov. 20 2020, Updated 3:20 p.m. ET

Forward PE

In the last part of the series, we’ll discuss Scotts Miracle-Gro’s (SMG) valuation multiple and compare it with the peer median. We’ll use the forward PE (price-to-earnings) ratio, as SMG has had stable earnings.

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Valuation multiple

The company is trading above its two-year historical average multiple of 18.9x. For the most part, Scotts Miracle-Gro has traded around its two-year average. However, since July 2016, the company’s multiple has been moving higher than its two-year average. The company’s forward PE hit a low point of 16x in May 2016 and hit its high point of 23x in October 2016.

Peer median

The company was trading close to its peer median of 21.4x on January 25. Recently, the company has moved even higher than the peer median. Over the last two-year period, SMG has traded below this median. The peer median over the past two years was 20.4x.

The company’s peers include Spectrum Brands (SPB), which was trading at 21.1x, Agrium (AGU), which was trading at 21.7x, and Home Depot (HD), which was trading at 21.4x. All three companies were trading close to the median.

After the company reports earnings on January 31, Market Realist will release a detailed analysis of its results. In the meantime, you can get updates on the agricultural fertilizer industry (SOIL) on our Agricultural Fertilizers page.


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