One of the most consistent pieces of advice that Paul Price gives in his writing on Real Money is to make sure you pay attention to the steady, stable and often overlooked stocks.
Price recently reiterated that point with the dark horse company La-Z-Boy (LZB) - Get LaZBoy Incorporated Report. He writes: “La-Z-Boy (LZB) chairs and furniture have been around since 1927, yet few people ever think about the firm as a potential investment.”
They should. “The company posted outstanding numbers over the most recent decade. Since the end of fiscal 2011 (ended April 30, 2012) all major business metrics surged higher. If the current year plays out as expected earnings per share will have risen by over 480%.”
You even get regular payouts. “Cash dividends were initiated in 2012. Since then they increased by 650%.”
While there have been setbacks, “Continuous shareholders have nothing to complain about. Even after dropping back from $46.74 in May, 10-year total return tallied 336.3%.”
In addition “The company is debt-free and has no defined benefit pension liability. As of July 24, LZB held about $7.32 per share in net cash.”
These are exactly the kind of numbers that investors should look for in an equity product, yet the company keeps managing to fly under the radar. As far as Price is concerned it shouldn’t, and the market’s loss can be your gain.
Just because a company is well known doesn’t necessarily mean that it’s your best investment. Companies that draw headlines are often expensive. They can also be volatile, as famous firms generally draw coverage for taking big risks while seeking big rewards. That doesn’t make them bad investments, but it does mean that they aren’t always good picks for the kind of steady growth which defines a successful portfolio.
“What more,” Price writes, “do you need to know?”