Friday, April 4, 2014

Dividends & Income Dividend Machine for 2014 - LEG Leggett & Platt

Another dividend machine for 2014. 

I have owned this stock for a while and now I think it should be a 2014 Dividend Machine.  Leggett & Platt makes all kinds of things for homes, offices, airplanes … they’re everywhere.   As you know I do not use current trends like housing starts to determine which stocks to buy.  I use my four Dividend Machine criteria and by golly LEG qualifies.

I noticed it today as I was looking through my portfolio for covered calls.    I found a nice call on LEG and I checked the Dividend Machine Fundamentals of LEG to make sure I still wanted to own it.  LEG's Dividend Machine Fundamentals are presented below.

Leggett & Platt (LEG) Dividend Machine Fundamentals

Today, as I write, LEG is trading about $32.50 which is the price I will use for my analysis.    Over the past 8 quarters, LEG consistently earned more than it paid out in dividends.   EPS = $1.34 and Dividends = $1.20.   LEG’s dividend yield is 3.68%. 

Dividend increases are very important to income investors and LEG makes the grade with an average dividend increase of 4% over the past five years.  LEG has been solidly managed and sports a debt to equity (D/E) ratio of .625.

See the table below for a summary of LEG’s Dividend Machine Fundamentals. 

Covered Call on LEG

The table below summarizes the income potential for investors who buy LEG at $32.50 and sell a June $35 call.   This kind of additional income is why I own LEG as one of my Dividend Machines.

Consider LEG for the income producing portion of your investment portfolio.