Is SMG a high-quality business?

AlphaMadera's AlphaQuality grade scores The Scotts Miracle-Gro Company on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how SMG compares to a Buffett-style quality bar.

What is The Scotts Miracle-Gro Company's AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to SMG based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes SMG a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

SMG - The Scotts Miracle-Gro Company

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $73.50 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Cyclical & Capital-Intensive

AlphaQuality — archetype-weighted quantitative grade

D 38.4 / 100 composite

Composite Grade

Composite of six pillars weighted for cyclical & capital-intensive businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 15%

D+ 43.2

5yr Avg ROIC 3.4% 27/100
Operating Margin Trend +0.86 pp/yr 81/100

Capital Efficiency

Weight: 15%

F 24.7

5yr Avg ROE 0.0% 10/100
5yr Share-Count CAGR 0.6% 52/100

Growth Quality

Weight: 10%

F 9.1

5yr Revenue CAGR -8.8% 2/100
5yr EPS CAGR -27.5% 0/100
Revenue-Growth Years (5) 2/5 40/100

Cash Generation

Weight: 15%

B+ 75.7

5yr FCF Margin 6.8% 57/100
5yr FCF/NI Conversion 1.10x 98/100

Balance Sheet

Weight: 25%

D- 29.4

Net Debt / EBITDA 5.51x 11/100
Interest Coverage (EBIT/Int) 2.72x 40/100
Altman Z-Score 2.25 49/100

Stability

Weight: 20%

D+ 43.5

EPS Volatility (σ/μ) 0.59 22/100
Piotroski F-Score 7 78/100
Negative-Revenue Years (5) 3/5 40/100

3 of 4 gurus held; 2 added; 1 trimmed; 1 full exit.

Holders: 3 -1
Avg Δ position: +57.1%
New buys: 0
Full exits: 1

Cooperman sold -100%
Wood increased +204%
Greenblatt decreased -41%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (15%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (10%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (25%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (20%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.