This Popular Gardening Stock Is Poised For A Double-Digit Breakout

Even where I live in Canada, glimpses of bare brown earth are starting to dapple white snow. It's not yet time for me to plant my garden, but that moment is not far off.

I'm not alone in my interest to grow some of my own food. Gardening ranks as one of the most popular outdoor leisure activities in North America. Additionally, the National Gardening Association reports that a well-maintained garden can help save you several hundred dollars a year in food costs.

Gardening is expanding beyond backyard plots, as community gardens and even urban apartment gardens increase in popularity.

A key beneficiary of this increasing interest in gardening is Scotts Miracle-Gro (NYSE: SMG ) . The Ohio-based company was started in 1868 and is the world's largest marketer of branded lawn and garden products.

Its global consumer segment, which accounts for roughly 90% of revenue, sells such products as fertilizers, grass seed, spreaders, and plant pest and disease control products. Some of its better-known brands are Scotts, Miracle-Gro, Ortho and Roundup.

It also generates revenue through its lawn care service division, which is the No. 2 player the country and provides residential and commercial lawn, tree and shrub care, and pest control services.

In January, the company acquired Action Pest Control, one of the largest exterminators in the Midwest. Management said this is part of their strategy to grow in the $7 billion pest control market.

They also see growth opportunities in hydroponics, indoor gardening and natural/organic products. With the USDA estimating about 15% of the world's food supply is now grown in urban centers and interest in edible gardening growing, especially among millennials, the company has increased spending on natural product R&D by 15% since 2012.

While revenue growth has been minimal over the past few years, the company has ramped up profits significantly. Adjusted earnings per share ( EPS ) grew 39% in fiscal 2013 and another 18% in the year ended Sept. 30, 2014.

This strong earnings performance allowed Scotts to issue a special dividend of $2 a share in August and initiate a $500 million share buyback program. Its regular quarterly dividend of $0.45 presents shareholders with a 2.7% forward annual yield.

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This Popular Gardening Stock Is Poised For A Double-Digit Breakout