Should I Buy Leggett and Platt (LEG)? Finance YouTuber Analysis

The YouTuber suggests Leggett and Platt as a value play with a 6.7% dividend yield. Despite a recent hit to earnings due to housing and auto market corrections, the company is a Dividend King with over 50 years of increasing dividends and has significant cash reserves. Its valuation is attractive, trading at a discount to its long-term average price-to-sales, and earnings are expected to rebound next year.

“The board gave us signal of its confidence with its dividend increase just last June and the valuation is very attractive here Shares are trading for just 0.78 time sales a discount of 13 from the longer term average if business does improve over the next year the stock price will reward investors along with that dividend but the risk is higher in this one compared to some of the others on the list.”

The YouTuber recommends Leggett & Platt due to its attractive valuation, trading at a discount to its long-term average revenue multiple. Despite current earnings pressure from housing and auto market slumps, the company has strong cash reserves and earnings are expected to rebound next year, supporting its long history of dividend increases. The board's recent dividend increase signals confidence.

“The valuation is very attractive here Leggett has grown its dividend by an annualized 4.7 percent over the last three years and while that could slow a little over the next few it's still a solid grower Shares are trading at just .78 times Revenue a discount of 13 from the longer term average.”

The analyst suggests Leggett & Platt could be a great long-term investment if its shares drop to around $30, as the company is currently facing headwinds from the housing market correction and auto sales slump, impacting earnings. While the dividend is safe, the company may need to take on more debt to maintain its dividend growth. A price of $30 would represent a significant discount on a price-to-sales basis, making it attractive for long-term investors.

“I wouldn't be surprised if the shares get back down to maybe about 30 each over the next year at that point Shares are going to be trading at 0.8 times on a price to sales basis and set us up for a very good long-term investment so keep this one on your radar”