Leggett & Platt (LEG) Dividend Stock Analysis

Leggett & Platt Dividend

Leggett & Platt has paid a dividend every year since 1939. The dividend had been increased for 52 consecutive years. However, on 4/20/24 LEG shocked the market by slashing its dividend to $.05 / quarter. 

Current Dividend Annualized: $0.20

Sometimes surprise dividend cuts causes markets to over react in punishing the offending stock. LEG has sufficient free cash flows to not only pay the dividend but also reduce debt and grow its future business. 

Leggett & Platt (LEG) Intrinsic Value – Margin of Safety Analysis          

(updated August 2024)

Normalized Diluted Earnings Per Share (TTM): $-5.95
Free Cash Flow Per Share (TTM): $2.13
Cash Flow From Operations (CFO) Per Share (TTM): $2.76

Estimated Intrinsic Value: $16

Target Buy Price Based on Required Margin of Safety =  $10
(Required Margin of Safety Based On Risk Stability Grade:

A = 0%, B = 20%, C = 40%, D = 60%, F = 80%)

Target SELL Price Based on Estimated Intrinsic Value = $16
(Allow Overvaluation Adjusted by Risk Stability Grade:

A = 40%, B = 25%, C = 15%, D = 5%, F = 0%)

Risk / Stability Grade: D

A grade indicates a quality company with a strong balance sheet, high earnings quality, and a positive business environment. These stocks require the slimmest margin of safety within the stock universe.

B grade indicates a company with a good balance sheet, good earning quality, and a stable business environment. The margin of safety required should be greater than stocks with an A grade but less than the average stock.

C grade indicates a company with a sufficient balance sheet, at least average earnings quality, and a reasonably stable business environment. The margin of safety required is greater than A & B stocks, but less than D & F stocks.

D grade indicates a company in good standing but has issues that could affect its stability and long term risks. D rated stocks should require a large margin of safety when purchased.

F grade indicates a company with significant issues that are currently affecting its stability and long term risks. Require an extremely large margin of safety for F rated stocks when purchased.

Financial Risk Grade: D

A grade indicates an extremely low probability of a dividend cut. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories.

B grade indicates a very low probability for a dividend cut.

C grade indicates a low probability for a dividend cut and/or average safety risk.

D grade indicates there are issues that should be considered concerning future dividend payments.

F grade indicates serious dividend safety risks. Investors should complete comprehensive due diligence before investing.

Business Quality Grade: C

A grade indicates earnings quality is high or far above average.

B grade indicates earnings quality is good and/or above average.

C grade indicates earnings quality is acceptable or average.

D grade indicates earnings quality is poor and requires thoughtful due diligence.

F grade indicates the quality of the earnings is poor or far below average requiring serious due diligence.

Earnings Report: 6/30/24

AAAMP Portfolios Position Disclosures:
Treasure Trove Dividend (TTD) – None
Global Dividend Value (GDV) – None
Dividend Growth & Income (DGI) – LONG
Global Value (GV) – None
Global Value Aggressive (GVA) – None
Global Conservative Income (GCI) – None 
Global Aggressive Income (GAI) – None

Company Description

Sector: Consumer Cyclical
Industry: Home Furnishings & Fixtures

Leggett & Platt designs and produces engineered components and products found in homes, offices, retail stores, automobiles, and commercial aircraft. It operates its business through four segments: residential products, furniture products, industrial products, and specialized products.

Its products include components and machinery, steel infrastructure, furniture and components, and various other products. The company operates all around the world, with the residential products and specialized products segments contributing heavily to the company’s revenue.

Disclaimer:
While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.