Sleep Your Way To Profits

I love writing updates on matress and pillow manufacturing companies, they always make for great titles!

Tepur-Pedic (TPX) has recently announced an increase in the company dividend.  This is one of those companies that Peter Lynch and Warren Buffett would like because it passes their “easy to understand business” test.

The leading manufacturer, marketer and distributor of premium mattresses and pillows worldwide, today announced its board of directors approved an increase in the quarterly dividend on its common stock, from 6 cents per share to 8 cents per share. The dividend
for the second quarter of 2007 is payable on June 14, 2007, to shareholders of record on May 31, 2007.

President and CEO H. Thomas Bryant said:

“Today’s increase reflects our confidence in the company’s growth prospects, as well as our strong cash flow and financial position. We are executing on our strategy to extend our global market leadership and deliver sustained, profitable growth.”

The dividend is still at less than 1.0%, but if the dividend continues to increase then Tempur-pedic may be a great candidate for a dividend growth portfolio. 

Extra due diligence is required on this company as the dividend payment has not been around for a long time. However, this may be an opportunity to get in on the ground floor of a future dividend grower! 

Let’s take a quick look at some of the numbers:

Profit Margin (ttm): 11.73%
Operating Margin (ttm): 21.98%
Return on Assets (ttm): 18.78%
Return on Equity (ttm): 61.87%
Total Debt (mrq): 368.12M
Total Debt/Equity (mrq): 1.7
Current Ratio (mrq): 1.816
Book Value Per Share (mrq): 2.585
Operating Cash Flow (ttm): 142.84M
Levered Free Cash Flow (ttm): 98.96M

One comment

  1. That is a lot of debt for some foam.

    There margins will shrink because their moat in falling apart.

    Do a google search and you can build your own memory foam mattress for 80% of the cost.

    They had there 20 years to take over the world and lost. Move on before they become the next Krispy Kreme.

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