While perusing the 52-week low list a few weeks ago, I came across La-Z-Boy
Not all Fools may agree with me on La-Z-Boy. On the same day I was falling under the spell of La-Z-Boy's free cash flow, Rick Aristotle Munarriz wrote this piece, highlighting La-Z-Boy's struggles against imports and increasing debt load.
You'll get no argument from me on whether imports have made furniture companies dicey investments. One look at Ethan Allen Interiors'
Last week, investors bid up shares of La-Z-Boy, apparently on news that the U.S. Commerce Department will impose tariffs on furniture imported from China. If investors are still thinking of La-Z-Boy as a domestic manufacturer that would reap maximum benefit from tariffs, they may be in for a surprise. Instead, investors may want to focus on La-Z-Boy's ability to execute a strategy that utilizes the best available source of product instead of a reliance on any one source.
La-Z-Boy does have more relaxing qualities to consider as well, like cash to pay the bills, healthy stock buybacks, and a 2.4% dividend yield. While La-Z-Boy's debt load may look worrisome -- it has been stuck at a fairly high level for over a year -- it isn't. The fixed low-interest rates on much of the debt show that not all is bad, and La-Z-Boy's free cash flow is robust enough to make the payments as they come due.
La-Z-Boy does have challenges to overcome, but at prices a little bit above the 52-week low of two weeks ago, I believe La-Z-Boy may let investors sit back and relax.
Fool contributor Nathan Parmelee owns shares in Hooker Furniture, but none of the other companies mentioned.