Yahoo Finance Leggett & Platt's (NYSE:LEG) Dividend Will Be Increased To $0.46
The board of Leggett & Platt, Incorporated (NYSE:LEG) has announced that it will be paying its dividend of $0.46 on the 14th of July, an increased payment from last year's comparable dividend. This will take the annual payment to 5.7% of the stock price, which is above what most companies in the industry pay.
View our latest analysis for Leggett & Platt
Leggett & Platt's Payment Has Solid Earnings Coverage
A big dividend yield for a few years doesn't mean much if it can't be sustained. The last payment made up 88% of earnings, but cash flows were much higher. In general, cash flows are more important than earnings, so we are comfortable that the dividend will be sustainable going forward, especially with so much cash left over for reinvestment.
Over the next year, EPS is forecast to fall by 2.7%. Assuming the dividend continues along recent trends, we think the payout ratio could reach 93%, which is definitely on the higher side.
Leggett & Platt Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2013, the annual payment back then was $1.16, compared to the most recent full-year payment of $1.84. This implies that the company grew its distributions at a yearly rate of about 4.7% over that duration. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.
The Dividend's Growth Prospects Are Limited
The company's investors will be pleased to have been receiving dividend income for some time. Let's not jump to conclusions as things might not be as good as they appear on the surface. Unfortunately, Leggett & Platt's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year.
Our Thoughts On Leggett & Platt's Dividend
Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. The company is generating plenty of cash, but we still think the dividend is a bit high for comfort. Overall, we don't think this company has the makings of a good income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 2 warning signs for Leggett & Platt that investors should know about before committing capital to this stock. Is Leggett & Platt not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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