Hefty dividends are sometimes associated with greater risk.
Yet, the right kind of stock history can put the big dividend in a more stable context.
For example, Leggett & Platt (LEG) has increased its payout for 41 years in a row. The current annualized yield is 4.1%.
Keeping and increasing the dividend is "a high priority," the company stated in its most recent 10-Q report. In 2011, the company paid out about 53% of cash flow per share.
The big dividend, though, hasn't turned Leggett into a sluggish stock performer.
In 2012, the stock rose 18%, topping the Nasdaq's 16% gain and the S&P 500's 13% pop. Since the start of the bull market in March 2009, Leggett & Platt has risen 142% vs. 115% for the Nasdaq and 93% for the S&P 500 ? and that's not including dividends.
Leggett's diversified manufacturing model involves four segments. Residential furnishings ? a segment that accounts for about half of sales ? covers products such as mattress springs, bed frames and carpet pads. The three other segments account for roughly a sixth of sales each.
Industrial materials produces steel wire and erosion-control products. Commercial fixturing and components entails products such as shelving, in-store displays and parts for office furniture manufacturers. The specialized products segment includes automotive seat support structures and product packages for police vehicles.
Earnings growth on a year-ago basis was 23% in Q2 and 45% in Q3. Revenue fell 1% in Q2 and rose 4% in Q3. The Street expects a 32% earnings pop in Q4 on a revenue gain of 2%.
The company will report results Feb. 5 at the market open.
Leggett & Platt's fortunes are closely tied to factors such as consumer confidence, disposable income, employment and housing turnover.
The company used the recent tight economic environment to reduce fixed costs but kept spare production capacity. This means a stronger rebound in the U.S. and world economy won't require huge capital investments for Leggett.
The U.S. accounts for 71% of sales.
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