If you're looking for a solid dividend stock in the home furnishings sector, you might want to check out Ethan Allen Interiors Inc. (ETD). This company is not only a leading interior design firm, but also a manufacturer and retailer of quality furniture and accessories. In this blog post, I'll give you some reasons why I think Ethan Allen is a good investment right now.
First of all, let's look at the growth rates of Revenue and Net Income. According to the latest quarterly report, Ethan Allen's revenue for the first quarter of fiscal 2024 was $191.8 million, up 4.7% from the same period last year. Net income was $18.2 million, up 10.4% from last year. The company also reported strong operating margins of 14.7%, which reflects its operational efficiency and cost control.
Second, let's talk about the expansion of services. Ethan Allen is not just a Furniture Seller, but also a very unique full-service interior design destination. The company offers free design consultations, custom upholstery, delivery and installation, and financing options to its clients. It also has a loyalty program called Ethan Allen Member Program, which gives members access to exclusive discounts, rewards, and events. Ethan Allen has a network of over 300 design centers in the U.S. and abroad, and it is constantly renovating and reopening its stores to enhance the customer experience.
Third, let's see how Ethan Allen is handling its debts and obligations. As of September 30, 2023, the company had $15 million of long-term debt and $39 million of cash and cash equivalents. The debt-to-equity ratio was 0.06, which is very, VERY, low compared to the industry average of 0.56. This means that Ethan Allen has a strong balance sheet and ample liquidity to meet its financial obligations and invest in its growth.
Finally, let's look at the Stock Price, Dividends, and average price variances (for Trading) over the past ten years. Ethan Allen's stock price has been on an upward trend since 2012, reaching a high of $36.20 in August 2023. The stock currently trades at $31.92 as of December 29, 2023, which is still above its fair value estimate of $30 by Zacks Investment Research. The stock also pays a generous dividend of $1.44 per share annually, which translates to a yield of 4.51%. The dividend has been growing steadily since 2014, and the payout ratio is only 40%, which means that there is room for further growth. The average price variance over the past ten years is 17%, which indicates that the stock is not very volatile and can provide stable returns. Considering the light price-movement, Traders would have to keep their margins fairly narrow.
In conclusion, I think Ethan Allen Interiors Inc. (ETD) is a great stock to buy and hold for the long term. The company has a strong brand reputation, a loyal customer base, a unique and diversified product portfolio, a robust financial performance, and a rewarding dividend policy. If you're interested in learning more about Ethan Allen, you can visit their website at www.ethanallen.com or their investor relations page at https://ir.ethanallen.com/.
