Why These 10 Dividend Stocks Are Declining?

7. The Scotts Miracle-Gro Company (NYSE:SMG)

Annual dividend yield: 3.98%

Ex-Dividend Date: February 21, 2025

Number of Hedge Funds: 28 (2024 Q3)

Quarterly dividend amount: $0.06

The Scotts Miracle-Gro Company (NYSE:SMG) declined by over 5% in the last few trading days following its decision to separate its hydroponics subsidiary, Hawthorne Gardening Company, due to issues with federal legalization. Chief Executive James Hagedorn made the following comment about that:

“We believe that moving Hawthorne out of Scotts Miracle-Gro is better for everyone. For our shareholders, this would eliminate the volatility of the cannabis sector and generate a significant uplift in gross margin.”

James Hagedorn believes that separating from the cannabis business would increase the P/E ratio of the stock, clearly establishing what the company’s equity represents. However, the investors share a mixed reaction to this decision, as some felt that there could be potential risks and uncertainties associated with the separation. In contrast, others see this as a strategic decision that would enhance the valuation of The Scotts Miracle-Gro Company (NYSE:SMG).