Haverty Furniture Companies, Inc. - A Speculative Analysis NYSE: $HVT

Introduction: Welcome back to my weekly stock analysis. Disclaimer: I am not invested in this one. Haverty Furniture Companies, Inc. (NYSE: HVT) Sector: Home Improvement Retail (Consumer Cyclical) Company Strengths & Risks: Haverty is a S&P 600 component out of Georgia. It is one of the top furniture retailers in the south and central US. Havertys is committed to quality furniture, diverse styles, and excellent value. Strengths: - good dividend growth rates - 9 years of dividend growth - very low PE ratio - Pivoting well (increasing revenue, EPS, EBITDA, decreasing debt) Risks: - weak stock growth (back to 30) - low yield (3%) - debt spike in 2014 - very low debt ratios Financial History and numbers HVT: Numbers from Seeking Alpha as of Nov 15, 2021 Numbers from Macro Trends as of Nov 15, 2021 Stock HVT P/E Ratio 7.14 Stock price $34.13 Current Annual Payout/Share $1.0 Yield 2.93% 5 Yr Div Growth Rate 17.48% 3 Yr Div Growth Rate 10.86% 1 Yr Div Growth Rate 25.33% Years Of Growth 9 Current Payout Ratio 20.92% Free Cash Flow / Share 7.327 Revenue (ttm) 0.987B Debt / Equity Ratio 0.16096 Debt / EBITDA 0.3534 EPS 4.78 ROI 23.30% ROA 12.60% I have to start with the debt ratios. The debt is starting to come down slowly. Equity is not keeping up, but this is not critical for a cyclical stock. Ebitda seems to be climbing but I suspect it may pull back. EPS and returns look good. 9 years of dividend growth also looks fine. I do have to talk about the odd dividend structure though. The company seems to give 3 normal dividends and 1 large special dividend in November. The normal dividend seems to be climbing. So I am content there. I am not willing to speculate on special dividend continuances or predictions. I will now use the 3 year dividend growth rate to project further. Year HVT 2022 1.11 2023 1.23 2024 1.36 2025 1.51 For another way, let's use historical payout ratio to project out. YEAR HVT EPS estimate 2021 4.78 EPS estimate 2022 4.26 2021 dividend 0.99997 2022 dividend 0.89119 Final Thoughts: Havertys seems committed to shareholder returns, albeit unconventional to me. They both have special dividends and share repurchases of $25 million, and $22 million of its class A shares. Covid doesn't seem to have rattled them. I do not know if HVT can expand with much success out of the current 16 states. I am also not sure if I am fully on board with the special dividends as opposed to paying down debt or growing the stock, but with a 20% payout ratio, I am considering hopping on. In the worst case, I don't see furniture ever going out of style. The concern would be the housing bubble, but that's not the topic of this post. For a final note, there seems to be a wedge forming that will collect at about 33$ around Dec 20. Of course I am leaving some cards on the table, but I believe that you should figure out if you chairish this stock. Weekly price estimate for a future date, via consulting the crystal ball: Predicted price for HVT for Dec 19, 2021: $32.79. There is no factual basis that I will give. I hope someone out there found this post interesting. Please supplement this with your own research. Thank you for reading, please give me feedback so that I can increase my standards for future analysis posts. If I have made a mistake, please correct me. Or if you have one that you want an analysis on, I might pick a comment to do an analysis of if I don't have any spice stored for the week.