Select Comfort Corp. (SCSS), Tempur-Pedic International Inc. (TPX), Leggett & Platt, Inc. (LEG): Which Stock Will Help You Sleep at Night?

Select Comfort also has no debt, a corporate governance risk score of 1 (the best), and price/book is 7.29. However, this mattress space is cutthroat and very economically sensitive.

SCSS Total Return Price data by YCharts

Sleep soundly with a Dividend Aristocrat

You could sleep like a baby with Dividend Aristocrat Leggett & Platt, Inc. (NYSE:LEG) with a yield of 3.60%. The company has raised their yield for 42 consecutive years and also has been buying back stock.This is probably the best way to play this space as Leggett & Platt makes most of the innersprings for these companies.

They are also benefiting from this hybrid mattress trend as it makes the trademarked Comfort Core fabric encased spring for Ultimate Hybrid Mattresses sold by various mattress companies.

Leggett & Platt, Inc. (NYSE:LEG) operates as a diversified manufacturer of furniture  innards, springs and such, as well as making automotive, office, and aerospace seating and components and retail furnishings like shelves and display units. As a double play on both a housing and auto industry resurgence and a search for yield the market has taken it up 52.36% in the last year.This has also taken up the short interest to 7.60% although it is decreasing.

The PEG is 1.35 and the price/book at 3.22. The trailing P/E is 18.67. Its main competition is Genuine Cast Parts on automotive and office products and and  Flexsteel Industries, Inc. (NASDAQ:FLXS) on residential and commercial furnishings.

However, the company is further diversifying with purchases like Western Pneumatic Tube, an aerospace supplier, and selling off non-growth drivers. The company has solid free cash flow and improving margins with 15.00% five year EPS growth expected. It is well-suited for a retirement portfolio.

Caveats are: steel is their main raw material so steel prices are a continuing concern, debt is high but manageable, and dividend yield growth is not thrilling.

LEG Dividend data by YCharts

How did you sleep?

You’ve probably slept fitfully if you own the mattress companies, with their ups and downs. Going forward results could be lumpy. You don’t need 30 days due diligence to see Select Comfort is better than Tempur Sealy. However, Leggett & Platt, Inc. (NYSE:LEG) is the best choice if you want to sleep at night.

AnnaLisa Kraft has no position in any stocks mentioned. The Motley Fool owns shares of Tempur-Pedic International.

The article Which Stock Will Help You Sleep at Night? originally appeared on Fool.com and is written by AnnaLisa Kraft.

AnnaLisa is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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