If EPS growth is important to you, Leggett & Platt (NYSE:LEG) offers an opportunity – Simply Wall St | Omd Cialis

For beginners, it can be a good idea (and an exciting prospect) to buy a company that has a good story to tell investors, even if it doesn’t currently have a track record of revenue and profits. Unfortunately, these high-risk investments often have little chance of ever paying off, and many investors pay a price to learn their lesson. Losing companies can act like a sponge for capital – so investors should be careful not to throw good money after bad.

Despite being in the age of blue sky investing in tech stocks, many investors are still employing a more traditional strategy; Buying shares in profitable companies such as Leggett & Platt (NYSE:LEG). That’s not to say the company is the best investment opportunity, but profitability is a key component of business success.

Check out our latest analysis for Leggett & Platt

How fast is Leggett & Platt growing?

In general, companies that are seeing earnings per share (EPS) growth should see similar trends in their stock price. As such, there are many investors who enjoy buying stocks in companies that increase earnings per share. Leggett & Platt has managed to grow EPS by 12% per year over three years. That’s a pretty good rate if the company can sustain it.

One way to check a company’s growth is to look at how its earnings and profit margins before interest and taxes (EBIT) are changing. Leggett & Platt has maintained solid EBIT margins over the past year while growing sales 20% to $5.2 billion. That’s really positive.

In the chart below, you can see the company’s revenue and earnings growth trend. To see the actual numbers, click on the chart.

NYSE:LEG earnings and revenue history as of August 2, 2022

Although we live in the present moment, there is little doubt that the future is most important in the investment decision-making process. So why not check out this interactive chart of future EPS estimates for Leggett & Platt?

Are Leggett & Platt Insiders Agree with All Shareholders?

Since Leggett & Platt has a market cap of $5.3 billion, we wouldn’t expect insiders to own a large percentage of the shares. But the fact that they have invested in the company puts our minds at ease. Holding $72 million worth of stock in the company is no joke, and insiders will work to ensure the best results for shareholders. This would suggest that the goals of shareholders and management are one and the same.

While it’s always good to see a strong belief in the company from insiders through heavy investment, it’s also important for shareholders to question whether management’s compensation policies are appropriate. Our quick analysis of CEO compensation seems to indicate that this is the case. The average total compensation for CEOs of companies similar in size to Leggett & Platt with market caps between $4.0 billion and $12 billion is about $8.3 million.

The CEO of Leggett & Platt received $4.2 million in compensation for the year ended December 2021. That’s below average for similarly sized companies and seems pretty reasonable. CEO pay is hardly the most important aspect of a company to consider, but when it’s reasonable, it gives a little more confidence that leadership has shareholder interests in mind. In general, it can be argued that a reasonable salary reflects good decision-making.

Does Leggett & Platt deserve a spot on your watch list?

On the upside for Leggett & Platt, earnings per share are growing. That’s nice to see. Earnings growth may be the main draw for Leggett & Platt, but the fun is Not stop there With a significant level of insider ownership and decent CEO pay, a reasonable mind might conclude this is a stock worth watching. What about risks? Every company has them and we discovered them 3 warning signs for Leggett & Platt (1 of which is significant!) that you should know.

The beauty of investing is that you can invest in almost any company you want. But if you’d rather focus on stocks that have demonstrated insider buying, here’s a list of companies with insider buying over the past three months.

Please note that the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

This Simply Wall St article is of a general nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

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