Leggett & Platt (NYSE:LEG)

Leggett & Platt manufactures components for residential, commercial furniture and automotive seating. It is the leading American manufacturer of residential furniture and bedding components, office furniture components, drawn steel wire, automotive seat supports and lumbar support systems. The company is facing a significant increase in raw materials.

The other day I was looking for a pencil that had slipped under my new sofa. I had bought it after testing several by the bucketload. It was by far the most comfortable and the most beautiful, even if it cost a lot. From time to time, you have to know how to treat yourself... When I came across my pencil, I saw written on the metal frame supporting the electric "relax" device, in all letters, the words: "Leggett & Platt". Imagine my surprise... I thought that this company was mainly present in the United States.

I have been following this company's stock in my strategy for some time now. Global Dividend Growers. It has the sad honor of being the red lantern of the portfolio. This means that the competition is great: a company that produces good products, sells them all over the planet and, moreover, has increased its dividend for 40 years in a row is thus considered a position to sell. But how is this possible?

LEG offers a very generous average yield of 5.74%The problem is that the payment of the dividend is no longer completely covered by the profit, since the distribution ratio s'élève à 106.73%. Cette difficulté à assurer son paiement se confirme d'ailleurs par une croissante annuelle moyenne très lente du dividende, avec 3.18%. Vous me direz que c'est déjà pas mal et que ça permet de se couvrir l'inflation, mais ce n'est rien en rapport aux 10% qu'on a d'ordinaire avec les bons payeurs de growing dividends.

There volatility du titre en CHF, avec 16.98%, est conforme à celle du marché, mais bien supérieur à celle de mon portfolioThe beta of 1.16 also indicates that the title is sensitive to market variations.

The company's turnover comes for the vast majority from the USA, the balance being divided between Canada, Europe, Mexico and China. This strong US representation is also confirmed by a $risk=0.36, indicating that a fall in the dollar is normally accompanied by a fall in the CHF value of the security.

Despite all the intrinsic qualities of the company and its products, the dividend potential is much greater with other stocks. In addition, we note that the payment of distributions is no longer assured by the profit. It is therefore better to favor other investments for the moment, even if it means returning to Leggett & Platt later, when the sky has cleared for it.