Leon’s Furniture Ltd
Is it a good company at a reasonable price? This has been a good solid investment for me. I think an expected total return of 8% per year is good and this stock has done that most years, but it does depend on when you buy. It is always best to buy a stock over time and in different months. The stock price could be reasonable based on the dividends yield tests.
I own this stock of Leon’s Furniture Ltd (TSX-LNF, OTC-LEFUF). I had some money in 2006 and this stock has been on MPL Communication’s Investor Reporter list for some time. It was also on Mike Higgs’ Dividend Growth Stock list. I bought some in 2006 and then some more in 2008, 2009, 2010,2013,2019 and 2022.
When I was updating my spreadsheet, I noticed I have had this stock for almost 20 years. I have a total return of 8.24% per year with 4.91% from capital gains and 3.33% from dividends. I bought this stock over 9 purchases from 2006 to 2022. Analysts do not think that the company will improve on their earnings much this year. They expect the AEPS to go from $2.31 to $2.30 and EPS to go from $2.29 to $2.31.
If you had invested in this company in December 2015, for $1,013.76 you would have bought 72 shares at $14.08 per share. In December 2025, after 10 years you would have received $542.16 in dividends. The stock would be worth $2,016.00. Your total return would have been $2,558.16. This would be a total return of 10.93% per year with 7.12% from capital gain and 3.81% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $14.08 | $1,013.76 | 72 | 10 | $542.16 | $2,016.00 | $2,558.16 |
The current dividend yield is moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 3.61%. The 5, 10 and historical median dividend yields are moderate at 3.19%, 3.18% and 2.38%. The dividend growth is moderate (8% to 14% per year) at 8.5% per year over the past 5 years. The last dividend increase was in 2025 and it was for 20%. They also paid a special dividend of $0.50 per year in 2026. Note that this company does not increase the dividends every year, but the dividends have been increasing over time.
The Dividend Payout Ratios (DPR) are good. The DPR for 2025 for Earnings per Share (EPS) is good at 37% with 5 year coverage at 43%. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is good at 36% with 5 year coverage at 30%. The DPR for 2025 for Cash Flow per Share (CFPS) is good at 26% with 5 year coverage at 28%. The DPR for 2025 for Free Cash Flow (FCF) is good at 27% with 5 year coverage at 33%. The FCF for 2025 varies from $210M to $237M. I am using the $210M.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 36.68% | 42.76% |
| AEPS | 36.36% | 30.06% |
| CFPS | 25.67% | 28.20% |
| FCF | 27.29% | 32.96% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2025 is good at 0.03 and currently at 0.03. The Liquidity Ratio for 2025 is good at 1.60 and 1.60 currently. The Debt Ratio for 2025 is good at 2.03 and 2.03 currently. The Leverage and Debt/Equity Ratios for 2025 are good at 1.97 and 0.97 and currently at 1.97 and 0.97.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.03 | 0.03 |
| Intang/GW | 0.34 | 0.36 |
| Liquidity | 1.60 | 1.60 |
| Liq. + CF | 1.95 | 1.85 |
| Debt Ratio | 2.03 | 2.03 |
| Leverage | 1.97 | 1.97 |
| D/E Ratio | 0.97 | 0.97 |
The Total Return per year is shown below for years of 5 to 37 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | 8.45% | 11.01% | 6.30% | 4.71% |
| 2015 | 10 | 7.70% | 10.93% | 7.12% | 3.81% |
| 2010 | 15 | 6.65% | 7.39% | 4.34% | 3.05% |
| 2005 | 20 | 7.44% | 9.29% | 5.81% | 3.48% |
| 2000 | 25 | 8.89% | 10.88% | 7.14% | 3.74% |
| 1995 | 30 | 9.86% | 11.96% | 7.79% | 4.17% |
| 1990 | 35 | 9.29% | 12.08% | 8.19% | 3.89% |
| 1988 | 37 | 8.77% | 12.08% | 8.27% | 3.81% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 7.67, 8.85 and 10.04. The corresponding 10 year ratios are 8.66, 9.51 and 12.52. The corresponding historical ratios are 9.15, 14.51 and 15.98. The current ratio is 11.51 based on a stock price of $26.56 and EPS estimate for 2025 of $2.31. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 7.73, 8.92 and 10.18. The corresponding 10 year ratios are 8.54, 9.50 and 12.39. The corresponding historical ratios are 11.27, 12.96 and 15.06. The current ratio is 11.55 based on a stock price of $26.56 and AEPS estimate for 2025 of $2.30. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $30.74. The 10-year low, median, and high median Price/Graham Price Ratios are 0.72, 0.80 and 0.96. The current ratio is 0.86 based on a stock price of $26.56. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Book Value per Share Ratio of 1.40. The current ratio is 1.45 based on a stock price of $26.56, Book Value of $1,256M and Book Value per Share of $18.26. The current ratio is 4% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 5.55. The current P/CF Ratio is 7.03 based on Cash Flow per Share estimate for 2026 of $3.78, Cash Flow of $261M and a stock price of $26.56. The current ratio is 27% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 2.38%. The current dividend yield is 3.61% based on a stock price of $26.56 and dividends of $0.96. The current dividend yield is 52% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 3.18%. The current dividend yield is 3.61% based on a stock price of $26.56 and dividends of $0.96. The current dividend yield is 52% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10-year median Price/Sales (Revenue) Ratio is 0.55. The current P/S Ratio is 0.70 based on a stock price of $26.56, Revenue estimate for 2026 of $2,616M and Revenue per Share of $38.02. The current ratio is 28% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price seems to be on the expensive side, but it could be reasonable. The 10 year dividend yield is showing the stock price as relatively reasonable and below the median, but this is not confirmed by the P/S Ratio test that is saying it is relatively expensive. The stock could be reasonable based on the 10 year median dividend test. However, a lot of the other tests are saying the stock price is reasonable but above the median.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (2) and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $36.00 with a high of $50.00 and a low of $30.00. The consensus stock price of $36.00 implies a total return of 39.16% with 35.54% from capital gains and 3.61% from dividends based on a current stock price of $23.56.
The only entry for 2026 says Hold on Stock Chase. The Analysts says that it is not actively traded. It is not much followed by analysts on Stock Chase. Amy Legate-Wolfe on Motley Fool thinks this company will be profitable despite the trade wars. Joey Frenette on Motley Fool thinks the firm looks well-equipped for the next upcycle. The company put out a Press Release about their fourth quarter of 2025 results.
Simply Wall Street via Yahoo Finance says it thinks this stock is undervalued and the Fair Value is $36.00. Simply Wall Street has 1 warning of unstable dividend track record. This is untrue. Sometime this site thinks that dividends paid in CDN$ are unstable. Simply Wall Street gives this stock 2 and one half stars out of 5.
Leon’s Furniture Ltd operates a network of home furniture, appliances, electronics, and mattress stores in Canada. Its retail banners include: Leon’s; The Brick; Brick Outlet and The Brick Mattress Store, The Brick’s Midnorthern Appliance, and Appliance Canada. It generates maximum revenue from the sale of goods at stores, followed by income from franchise operations, the sale of extended warranties, etc. Its web site is here Leon’s Furniture Ltd.
The last stock I wrote about was about was Supremex Inc (TSX-SXP, OTC-SUMXF) … learn more. The next stock I will write about will be Barrick Mining Corp (TSX-ABX, NYSE-B) … learn more on Wednesday, April 29, 2025 around 5 pm. Tomorrow on my other blog I will write about Free Cash Portfolio…. learn more on Tuesday, April 28, 2026 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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