Scotts Miracle Gro Dividend Hike & $2.00 Special Dividend!

I was wondering what was going to blossom from the fertilizer of Scotts Miracle Gro from their earnings performance so far this year!  I love surprises and holding on the edge of my seat – especially when it comes to dividend announcements and increases.  Scotts (SMG) announced on August 11th their recent dividend. Usually they announced their dividend when they announce their earnings release, and this didn’t happen.  They did state they would be providing a more than generous amount back to their shareholders during that first week of August earnings release.  I scoured any news for days afterwards, to still to no avail.  However, this past Monday, I smiled.

Scotts Miracle Gro announced a Special-Dividend of $2.00 per share!  Now, a special dividend is something that is typically a “one-time” event and is there to give more back to shareholders.  Further, what is astonishing, is the $2.00 special dividend is larger than their annual dividend – thanks!  I own 36 shares – so that is $72.00 being added in right there for the month of September when it pays, a nice uptick to my annual dividend earned for the year, thank you again Scott’s.  This will be DRIPd in my portfolio, thus could have the potential of adding at least 1 share if not 1.5.  I will not factor this $2.00 into my project income for my portfolio due to the one time event.

Further, as an additional point of measure, they approved a $500 million share repurchase program for the next 5 years, thus reducing the amount of shares outstanding = higher earnings per share = higher share prices.  I don’t get too excited about this, but appreciation is always nice to have – as long as the dividend follows suit – one of the reasons why I track the 5 year dividend yield average

However, the fun isn’t over yet.  Though I’m sure the $2.00 special dividend played into factor with this – Scott’s also announced a dividend increase from $0.4375 to $0.45 per share per quarter going forward!  A nice modest 2.85% growth on top of a monster $2.00 dividend this year is quite alright with me – as my total dividend package come mid-September should be $88.20 which is far more than the $15.75 I would have received from my 36 shares at the old $0.4375 dividend rate and no special dividend.

As I reviewed their EPS of $2.90 for 6 months ended.. I know and feel this dividend will be strong and sustainable going forward and am excited for the 2015 year – as I can see a monster dividend increase next August – as long as they don’t toss out $2.00 more per share to us – but I would NOT complain at all!  This is what dividend investing into sound, strong and fundamentally stable companies is all about.  Have any of you received great dividend news such as this?  Please share below – I had to post to bring more awareness to the stock and other highlights as a dividend investor!  Hope everyone enjoyed their weekends, talk soon and thanks for stopping by.

-Lanny

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9 thoughts on “Scotts Miracle Gro Dividend Hike & $2.00 Special Dividend!

  1. That’s a nice hefty dividend. The dividend hike is nice too! Not sure you know this, but CME does a special dividend every year plus regular quarterly dividends. They’re pretty consistent with raising their dividend too.

    Cheers.

    • Henry,

      Thanks for stopping by. CME eh? I just looked at their dividend history – nice growth in the dividend, plus that extra special little piece.. it’s interesting. A very market maker for lack of better words it looks like. Never really dove into their financial statements. How long have you owned them Henry? Pumped you stopped by, talk soon!

      -Lanny

      • Hi Lanny,

        I owned CME since 2012, prior to their announcement of a consistent annual special dividend. The overall business is very durable, they have a strong network effect. I suggest reading their annual reports, it’s fairly good.

        Cheers.

        • Henry,

          That’s awesome. That’s the plan for the weekend – CME is on the docket. I dig it and am looking forward to it, and it’s nice knowing that you have owned it for quite some time. I can’t wait to read. It’s on the list.

          -Lanny

  2. Hi Lanny,
    Congrats, that’s awesome! I bought 3 more bags of Scotts mulch last weekend which surely helped their decision to pay a special dividend.

    I’m the opposite of you when it comes to dividend announcements – I hate surprises 😉 I used to wonder why companies would spend money doing stock buybacks but now I think it’s good – there’s more chance of dividend growth since there are fewer shares to payout.

    Keep feeding your portfolio and enjoy watching it grow 🙂
    Best wishes,
    -DL

    • DivLife,

      Thanks for purchasing more mulch – I APPRECIATE IT : ) haha but in all seriousness – it’s great when this type of news comes out, truly makes our research feel more worth it, right?

      It does have both of us on the edge of our seats, that’s for sure. Buybacks are great, but I just hope the yield sticks along with the increase in share price as well.

      Thanks DL — let’s keep both our portfolios growing. Talk soon!

      -Lanny

    • Dan,

      You’ll get one, I know it – it has to happen. A lot of them paid special dividends two years ago due to the potential tax hike on dividends, so many paid a hefty one in november/december. LETS HOPE THAT DOESN’T HAPPEN AGAIN, that is having our backs to the ropes on the looming tax effect of paying at ordinary income rates.

      Thanks again for stopping by Dan, talk soon.

      -Lanny

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