Hefty dividends are sometimes associated with greater
Yet, the right kind of stock history can put the big dividend
in a more stable context.
For example,Leggett & Platt (
) has increased its payout for 41 years in a row. The current
annualized yield is 4.1%.
Keeping and increasing the dividend is "a high priority," the
company stated in its most recent 10-Q report. In 2011, the
company paid out about 53% of cash flow per share.
The big dividend, though, hasn't turned Leggett into a
sluggish stock performer.
In 2012, the stock rose 18%, topping the Nasdaq's 16% gain and
the S&P 500's 13% pop. Since the start of the bull market in
March 2009, Leggett & Platt has risen 142% vs. 115% for the
Nasdaq and 93% for the S&P 500 -- and that's not including
Leggett's diversified manufacturing model involves four
segments. Residential furnishings -- a segment that accounts for
about half of sales -- covers products such as mattress springs,
bed frames and carpet pads. The three other segments account for
roughly a sixth of sales each.
Industrial materials produces steel wire and erosion-control
products. Commercial fixturing and components entails products
such as shelving, in-store displays and parts for office
furniture manufacturers. The specialized products segment
includes automotive seat support structures and product packages
for police vehicles.
Earnings growth on a year-ago basis was 23% in Q2 and 45% in
Q3. Revenue fell 1% in Q2 and rose 4% in Q3. The Street expects a
32% earnings pop in Q4 on a revenue gain of 2%.
The company will report results Feb. 5 at the market open.
Leggett & Platt's fortunes are closely tied to factors
such as consumer confidence, disposable income, employment and
The company used the recent tight economic environment to
reduce fixed costs but kept spare production capacity. This means
a stronger rebound in the U.S. and world economy won't require
huge capital investments for Leggett.
The U.S. accounts for 71% of sales.