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Leggett & Platt Will Discuss Its Target and Opportunities on September 14

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Nov. 20 2020, Updated 3:49 p.m. ET

Price movement

Leggett & Platt (LEG) rose by 0.27% to close at $51.84 per share during the fifth week of August 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were 0.27%, -1.8%, and 25.1%, respectively, as of September 2.

LEG is now trading 0.87% below its 20-day moving average, 0.47% below its 50-day moving average, and 10.2% above its 200-day moving average.

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Related ETFs and peers

The SPDR S&P Homebuilders ETF (XHB) invests 3.1% of its holdings in Leggett & Platt. The ETF tracks a broad-based, equal-weighted index of US companies involved in the homebuilding industry. The YTD price movement of XHB was 5.9% on September 2.

The iShares Dow Jones Select Dividend ETF (DVY) invests 0.77% of its holdings in Leggett & Platt. The ETF tracks a dividend-weighted index of US companies. The index selects roughly 100 stocks based on dividend yield from a broad market-cap universe.

The market caps of Leggett & Platt’s competitors are as follows:

  • Genuine Parts (GPC): $15.3 billion
  • Illinois Tool Works (ITW): $43.2 billion

Latest news and 2Q16 performance

In a press release on August 31, 2016, Leggett & Platt “announced that it will host an Investor Day on Wednesday, September 14, 2016…The company will discuss its TSR framework, longer-term financial targets, and opportunities in four of its key businesses.”

Leggett & Platt reported 2Q16 net sales of $958.9 million, which represents a fall of 3.9% from its net sales of $997.3 million in 2Q15. Sales from the company’s Residential Furnishings and Industrial Materials segments fell by 5.7% and 28.5%, respectively, and sales from its commercial products and specialized products segments rose by 1.0% and 9.2%, respectively, between 2Q15 and 2Q16. LEG’s gross profit margin and EBIT (earnings before interest and taxes) rose by 5.5% and 22.9%, respectively.

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LEG’s net income and EPS (earnings per share) rose to $121.2 million and $0.87, respectively, in 2Q16, as compared to $77.7 million and $0.54, respectively, in 2Q15. It reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) and adjusted EPS of $161 million and $0.66, respectively, in 2Q16, which represent rises of 9.1% and 24.5%, respectively, over 2Q15.

LEG’s cash and cash equivalents and inventories rose by 3.5% and 2.5%, respectively, between 2Q15 and 2Q16. Its current ratio and long-term debt-to-equity ratio rose to 2.0x and 1.0x, respectively, in 2Q16, as compared with 1.5x and 0.75x, respectively, in 2Q15.

Quarterly dividend and projections

Leggett & Platt has declared a quarterly dividend of $0.34 per share on its common stock. The dividend is payable on October 14, 2016, to shareholders of record on September 15, 2016.

LEG has made the following projections for 2016:

  • sales of ~$3.9 billion, which assumes “unit volume growth in the mid-single digits, offset by a 2% reduction from commodity deflation and currency impacts, and a 3% year-over-year decrease from the combination of 4Q 2015 and 2Q 2016 divestitures, net of small acquisitions.”
  • EBIT margin of ~13%
  • EPS from continuing operations in the range of $2.45–$2.60, including 2Q16’s EPS benefit of $0.06 from unusual items
  • cash from operations of over ~$500 million
  • capital expenditure of $130 million
  • dividend payments of ~$175 million
  • repurchase of 4 million–5 million shares
  • issuance of ~2 million shares for employee benefit plans
  • effective tax rate of 25%

For ongoing analysis of this sector, please visit Market Realist’s Consumer Discretionary page.

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