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Recline and Define Your Interest in These Companies: Ethan Allen Interiors Inc. (ETH), Leggett & Platt, Inc. (LEG)

Net sales at their Retail division increased 6.1 percent to $151.8 million. This includes comparable design center growth of 4.9 percent. Retail division written orders increased 1.2 percent over the 10.3 percent growth in the year ago second quarter. Comparable design center written orders increased 0.1 percent over the 6.7 percent growth the year before. Investors should note that it’s all growth here, though it may be modest in some cases – but no declines.

Excluding special items in both periods, net income for this quarter was $11.4 million, or $0.39 per diluted share, compared to $8.6 million, or $0.30 per diluted share in the year ago period. US GAAP net income for the quarter was $9.8 million, or $0.34 per diluted share, compared to the prior year of $8.1 million, or $0.28 per diluted share.

What’s significant for investors concerning the company? They expanded their global operations by entering the European and Montreal markets. They opened design centers in Brussels, Belgium and in Montreal, Quebec. Physical expansion (design centers), and net sales and net income growth is typically a sign of a quality company, in terms of finances and corporate management. Dividend-favoring investors should consider that the Company declared a regular quarterly cash dividend of $0.09 per share.

Going forward, investors may wish to investigate corporations that produce products we lounge, sleep, and do whatever in, everyday of our lives. They can offer a more relaxing investing environment compared to higher-risk equity offerings. If you play the more riskier ventures, a step back to recline in one of these stocks, or something such as Leggett & Platt, Inc. (NYSE:LEG) can provide the soothing rest one often needs after bolder forays on the market.

Leggett & Platt’s Residential Furnishings segment is the leading supplier of mattress springs, pocketed coils, bed frames, ornamental beds, bedding accessories, and more. Overall, full year 2012 sales increased 2 percent to $3.72 billion. Unit volume grew 3 percent and acquisitions (net of divestitures) contributed 1 percent to sales. EBIT increased, and EBIT margin improved from 6.5 percent in 2011 to 9.2 percent in 2012.

A key point for investors to consider: President and CEO Mr. David S. Haffner stated that the company “…generated more than enough cash from operations to readily fund dividends and capital expenditures, something we’ve accomplished for over 20 years.”

You may be getting very, very sleepy, like me, with a smile on your face, as you ponder possible returns from companies relating nice financial bedtime stories to potential investors. These aforementioned stocks are no guarantee against sleepless nights. However, you usually can get your 7 or 8 hours more consistently than with investments that are more adventurous.

The article Recline and Define Your Interest in These Companies originally appeared on and is written by Michael Ugulini.

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