Logitech: Why I'm Putting This Dividend Grower On My Radar

seekingalpha04-11

Logitech International S.A. is a strong company with well-established brands and a growing presence in the B2B segment.The company has a solid balance sheet with no long-term debt and focuses on ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2426261897?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1514645815/image_1514645815.jpg","is_english":true,"pubTime":"2024-04-11 23:09","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2426261897","market":"sg","top_or_hot":-1,"title":"Logitech: Why I'm Putting This Dividend Grower On My Radar","media":"seekingalpha","content":"<div>\n<p>Logitech International S.A. is a strong company with well-established brands and a growing presence in the B2B segment.The company has a solid balance sheet with no long-term debt and focuses on ...</p>\n\n<a href=\"https://seekingalpha.com/article/4683296-logitech-why-im-putting-this-dividend-grower-on-my-radar\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Logitech: Why I'm Putting This Dividend Grower On My Radar</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nLogitech: Why I'm Putting This Dividend Grower On My Radar\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-11 23:09 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4683296-logitech-why-im-putting-this-dividend-grower-on-my-radar><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Logitech International S.A. is a strong company with well-established brands and a growing presence in the B2B segment.The company has a solid balance sheet with no long-term debt and focuses on ...</p>\n\n<a href=\"https://seekingalpha.com/article/4683296-logitech-why-im-putting-this-dividend-grower-on-my-radar\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4535","symbol_name":"淡马锡持仓","start_time":0,"source_url":"https://seekingalpha.com/article/4683296-logitech-why-im-putting-this-dividend-grower-on-my-radar","article_id":"2426261897","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1514645815/image_1514645815.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2426261897","pubTimestamp":1712848195,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Logitech International S.A. is a strong company with well-established brands and a growing presence in the B2B segment.The company has a solid balance sheet with no long-term debt and focuses on capit","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4535":"淡马锡持仓","LU0061474705.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN \"AU\" (USD) ACC","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","IE00BKDWB100.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","BK4538":"云计算","BK4579":"人工智能","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","IE00B1BXHZ80.USD":"Legg Mason ClearBridge - US Appreciation A Acc USD","LU0276348264.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN\"AUP\" (USD) INC","LU0061475181.USD":"THREADNEEDLE (LUX) AMERICAN \"AU\" (USD) ACC","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","BBY":"百思买","BK4076":"电脑与电子产品零售","BK4122":"互联网与直销零售","BK4551":"寇图资本持仓","BK4220":"综合零售","IE0009356076.USD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A2\" (USD) ACC","IE00B7KXQ091.USD":"Janus Henderson Balanced A Inc USD","LU0289941410.SGD":"AB FCP I Dynamic Diversified AX SGD","BK4585":"ETF&股票定投概念","BK4567":"ESG概念","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","IE0004445239.USD":"JANUS HENDERSON US FORTY \"A2\" (USD) ACC","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","LU0238689110.USD":"贝莱德环球动力股票基金","LU0109391861.USD":"富兰克林美国机遇基金A Acc","IE00B19Z9505.USD":"美盛-美国大盘成长股A Acc","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0072462426.USD":"贝莱德全球配置 A2","BK4559":"巴菲特持仓","LU0082616367.USD":"摩根大通美国科技A（dist）","BK4554":"元宇宙及AR概念","BK4561":"索罗斯持仓","LU0080751232.USD":"富达环球多元动力基金A","LU0061474960.USD":"天利环球焦点基金AU Acc","IE00BMPRXR70.SGD":"Neuberger Berman 5G Connectivity A Acc SGD-H","BK4550":"红杉资本持仓","LU0308772762.SGD":"Blackrock Global Allocation A2 SGD-H","BK4566":"资本集团","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","LU0234572021.USD":"高盛美国核心股票组合Acc","BK4507":"流媒体概念","BK4534":"瑞士信贷持仓","LOGI":"罗技","BK4548":"巴美列捷福持仓","BK4533":"AQR资本管理(全球第二大对冲基金)","BK4588":"碎股"},"translate_title":"罗技：为什么我把这个股息增长者放在我的雷达上","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BBY":1,"LOGI":1},"content_text":"Logitech International S.A. is a strong company with well-established brands and a growing presence in the B2B segment.The company has a solid balance sheet with no long-term debt and focuses on capital returns to shareholders through dividends and share buybacks.However, the current valuation of Logitech stock is a bit high and may not fully account for potential risks, so it may be better to wait for a lower entry point.   Galeanu Mihai It pays to own companies with strong brand names and whose products you like to use. Having a strong brand enables pricing power, and the higher margins enable the development of better products that command premium pricing compared to competitors, thereby resulting in a virtuous cycle. Such I find the case to be with Logitech International S.A. (NASDAQ:LOGI), whose wireless mouse I use every day. In fact, I happen to like their quality and craftsmanship so much that my entire family uses their accessories, from keyboards to computer mice. Ironically, however, their stock isn’t one that I’ve purchased. As shown below, LOGI climbed to its 5-year high of near-$140 in June 2021, when the majority of office workers were working from home. It’s since fallen to as low as the low $40s as shown below, climbing back to $85.94 at present. LOGI Stock 5-Yr Trend (Seeking Alpha) In this article, I explore this stock including its recent business performance, and discuss why LOGI just may be a great stock to keep on the investment radar, so let’s get started! Why LOGI? Logitech is a Swiss company that was founded in 1981, with brands that include Logitech, Logitech G, Streamlabs and Ultimate ears. It designs and manufactures computer accessories such as keyboards, mice, headsets, wireless speakers, and cameras for conference rooms. LOGI delivered mixed results in its last reported quarter of Q3 2024 (ended December 31, 2023, with results released on January 22nd) This includes fiscal Q3 sales being down by 1% YoY in U.S. dollars and down by 3% YoY on a constant currency basis. Despite the underwhelming top-line performance, LOGI was able to grow its operating income by 22% over the prior year period through tight management of costs and promotional spend. As shown below, while LOGI’s revenue has declined since 2021, that decline is starting to plateau, landing at $4.2 billion over the trailing 12 months. At the same time, LOGI appears to have a rather stable operating cost base, thereby resulting in much higher margins when revenue is higher and suggesting strong operating leverage. As shown below, while operating margin is down from its peak in 2021, it still follows an upward trend line over the past 10 years, landing at 12.2% for the trailing 12 months. LOGI Revenue and Op Margin (YCharts) This enabled 58% YoY growth in cash flow from operations to $443 million, which helped to pad its cash balance to a sizable $1.4 billion, even after LOGI repurchased $188 million worth of stock during fiscal Q3. As shown below, LOGI has been a material repurchaser of its stock over the past 3 years, reducing its share count by a substantial 8.1% over this timeframe. LOGI Shares Outstanding (Seeking Alpha) Looking ahead, I don’t see much upside potential on the consumer end of the business, as recent results suggest that consumers are still working through inventory purchased through the pandemic, and given first-hand experience with the quality of its products, they generally don’t require a quick refresh cycle. However, LOGI does have substantial greenfield opportunity potential in the business segment, considering that its products are lowly penetrated in this market. This opportunity was highlighted by management during the last conference call: We also have grown online a lot with our e-retail customers. And then of course, there's B2B and we're newer to the B2B business. But the opportunity there is gargantuan. So many meeting rooms that are not yet enabled with video. And as that corporate spending comes back, I think we're really well positioned with products that are fantastic, easy to use, great value for that B2B segment. Opportunity everywhere. B2B is a little newer to us, but I'm quite bullish on that. Over the next few quarters, I would look at LOGI’s progress into the B2B segment and whether if it can gain traction against competitors in the space like Polycom. In addition, I’d look for a stabilizing retail business environment and potential for signs of improvement should consumers wear down existing inventory and/or require new LOGI inventory to pair with AI-enabled devices. Risks to LOGI include potential for macroeconomic headwinds driven by inflation, which could result in lower demand for its products. In addition, LOGI remains reliant on brick-and-mortar stores like Best Buy (BBY) despite growing e-commerce sales. As such, store closures could also negatively impact sales and result in higher advertising spend on platforms like Amazon (AMZN) to get products in front of customers’ eyeballs. Importantly, LOGI maintains a strong balance sheet with $1.4 billion in cash on hand, as noted earlier. It also carries no long-term debt, resulting in a negative net debt balance of $1.3 billion, due to having more cash than long-term liabilities such as capital leases, of which there is only $63 million worth. This enables LOGI to spend excess operating cash on capital returns to shareholders through buybacks and dividends. Speaking of which, LOGI currently yields 1.3% and the dividend is well-covered by a 31% payout ratio. It also comes with 10 years of consecutive growth and a 5-year dividend CAGR of 11%. The main drawback for me is LOGI’s rich valuation at the current price of $85.94 with a forward PE of 22.0, which, as shown below, sits above its historical P/E valuation of 21.4 over the past 20 years. It’s also worth noting that the historical valuation is also somewhat skewed by LOGI’s high valuation during the early pandemic years. FAST Graphs The current forward P/E of 22.0 already bakes in 21% forward EPS growth that analysts expect from the company this year, and analysts expect 5-11% annual EPS growth in the 2025-2026 timeframe. Considering the slowdown in sales, I believe these growth estimates may be a bit too optimistic, as there is only so much that LOGI can squeeze out to improve operating margins. As such, I believe a more reasonable entry point for LOGI resides in a P/E range of 16-18x. This is considering the strength of LOGI’s brands and balance sheet, while also bearing in mind the consumer discretionary nature of its products. Potential catalysts for an upgrade to the valuation target include traction in the business segment, should it make strong headway there. Investor Takeaway  Overall, LOGI is a strong company with a solid balance sheet, well-established brands, and a growing presence in the B2B segment. It carries no long-term debt, enabling it to focus on capital returns to shareholders through dividends and share buybacks. However, its current valuation appears to price in much of its potential tailwinds without much focus on risk, and share buybacks aren't nearly as accretive at its current price as when it was trading at cheaper levels. As such, I would look for a lower entry point before entering Logitech International S.A. stock, and therefore rate it as a \"Hold\" at present.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2426261897"}