Posted on by FiveTwenty

2022 Week 9: Leggett & Platt (NYSE: LEG)

Portfolio Update

The FiveTwenty portfolio received no dividends in the past week.

Past Week Dividend$0
Current Quarter Dividend (Q1 2022)$448.58
LifeTime Dividend$2,559.39
Estimated Annual Dividend$4,485.01
Dividend Scorecard

The capital allocation for the week of 02/27/2022 to 03/05/2022 will be used to add to our position in Leggett & Platt (NYSE: LEG).

LEG – Position Update

Since our last check-in on LEG in week 4 of 2022, the company reported Q4 2021 and full year earnings on 02/07/2022. In addition, the share price decreased 4.4% from $39.03 to $37.31 during the period.

TTMPrev. Update10-year median
Dividend Streak50 years50 years
Yield4.45%4.25%3.53%
Payout Ratio59.71%159.93%2
P/E13.42114.092
Entry Criteria Scorecard

1 computed using TTM adjusted EPS of $2.78 as of Q4 2021
2 computed using TTM adjusted EPS of $2.77 as of Q3 2021

FY 2021 earnings report

Did LEG’s latest earnings report raise any warning flags?

For Q4 2021 and full year 2021, LEG delivered record revenues and strong financial results.

In Q4 2021, revenue grew 13%, net earnings decreased 2%, and adjusted EPS were 2.5% lower than in Q4 2020. Revenue was driven higher by increase in prices while lower volume and margin caused the decreased in net earnings and EPS.

For the full year 2021, revenue grew 19%, net income increased 59%, and adjusted EPS where 28.7% higher than in FY 2020. The across the board increased were driven by higher volume, higher selling prices, and margin expansion over the previous year.

Revenue
(in millions)		Net Income
(in millions)		Adj. EPS
.
FY 2020$4,280.2$253.0$2.16
FY 2021$5,072.6$402.4$2.78
% Change19%59%28.7%

Additional noteworthy developments during the quarter:

  • On 02/22/2022, LEG declared a quarterly dividend of $0.42 to be paid on 04/15/2022 to shareholders of record on 03/15/2022.

Looking ahead, management expects 2022 revenue of $5.3 to $5.6, a 4% to 10% increase over 2021. EPS is expected to be between $2.70 and $3.00.

Thesis

Why are we adding to our position in LEG?

Solid Q4 and full year 2021 results, further confirmed our expectations in the ability of LEG to continue to be a reliable source of growing dividends. Furthermore, we view the continued share price weakness as a great opportunity to build our position in the company.

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