Sometimes investing in a company is really investing in a management that will take care of your investment and cares for its shareholders. HNI Corporation may just be one of these companies and it could just be great for an investor's portfolio. HNI has been around for more than 60 years and has been growing its revenues, earnings and dividends for at least the last 15 years. It also has a great set of core principles and beliefs and believes in building the best products and returning their profits back to their shareholders. And that's the kind of company I'm always interested in.
HNI Corporation (formerly known as HON Industries) is the secound-largest office furniture manufacturer in the world in regard to revenues resulting from office segment sales, behind Steelcase . Its headquarters is in Muscatine, Iowa. HNI is the leading gas and wood burning fireplace manufacturer and marketer in the US. HNI's brands include The HON Company, Allsteel, Gunlocke, Paoli, Maxon, HBF, Sagus, Heatilator, Heat & Glo, Harman, and Quadra-Fire. The company was founded in 1944 by engineer, C. Maxwell Stanley; advertising executive, Clem Hanson; and industrial designer, H. Wood Miller.
HNI Corporation (formerly known as HON Industries) is the secound-largest office furniture manufacturer in the world in regard to revenues resulting from office segment sales, behind Steelcase . Its headquarters is in Muscatine, Iowa. HNI is the leading gas and wood burning fireplace manufacturer and marketer in the US. HNI's brands include The HON Company, Allsteel, Gunlocke, Paoli, Maxon, HBF, Sagus, Heatilator, Heat & Glo, Harman, and Quadra-Fire. The company was founded in 1944 by engineer, C. Maxwell Stanley; advertising executive, Clem Hanson; and industrial designer, H. Wood Miller.
HNI Corporation engages in the design, manufacture, and marketing of office furniture and hearth products primarily in the United States, Canada, China, Hong Kong, India, and Taiwan. The company’s Office Furniture segment offers a range of metal and wood commercial and home office furniture, which include storage products, desks, credenzas, chairs, tables, bookcases, freestanding office partitions and panel systems, and other related products under the HON, Allsteel, Maxon, Gunlocke, Paoli, HBF, artcobell, Midwest Folding Products, American Desk, basyx by HON, Lamex, and ERGO brands, as well as under private labels. This segment sells its products through independent, local office furniture, and office products dealers; national office product distributors; selling relationships with the end-users; wholesalers; and direct sales to federal, state, and local government offices. The Hearth Products segment provides various gas, electric, wood, and biomass burning fireplaces; inserts; stoves; facings; and accessories, primarily for the home under the Heatilator, Heat & Glo, Majestic, Monessen, Quadra-Fire, Harman Stove, Vermont Castings, and PelPro brand names. This segment markets its products through dealers and distributors, as well as through company-owned distribution and retail outlets. HNI Corporation was founded in 1944 and is headquartered in Muscatine, Iowa.
(Summary) (Company) (Chart)
| 30 March 2016 Price $38.55 1yr Target $42.00 Analysts 1 Dividend $1.06 Payout Ratio 31.92% 1yr Cap Gain 8.94% Yield 2.74% 1yr Tot Return 11.68% P/E 16.62 PEG 0.92 Beta 1.33 | EPS (ttm) $2.32 EPS next yr $2.97 EPS next 5yr 18.00% 1yr Price Support $53.46 Market Cap $1.70 Bil Revenues $2.30 Bil Earnings $105.40 Mil Profit Margin 4.56% Quick Ratio 0.70 Current Ratio 1.00 Debt/Equity 0.41 | 1yr RevGR 9.34% 3yr RevGR 4.71% 5yr RevGR 6.44% 1yr EarnGR 30.96% 3yr EarnGR 29.09% 5yr EarnGR 31.50% 1yr DivGR 6.00% 3yr DivGR 3.32% 5yr DivGR 4.27% ROA 8.20% ROE 23.50% |
Operating Businesses
HNI Corporation is an Iowa corporation incorporated in 1944. The Corporation is a provider of office furniture and hearth products. Office furniture products include panel-based and freestanding furniture systems and complementary products such as seating, storage and tables. These products are sold primarily through a national system of dealers, wholesalers and office product distributors but also directly to end-user customers and federal, state and local governments. Hearth products include a full array of gas, wood and pellet burning fireplaces, inserts, stoves, facings and accessories. These products are sold through a national system of dealers and distributors, as well as Corporation-owned distribution and retail outlets. In fiscal 2015, the Corporation had net sales of $2.3 billion, of which approximately $1.8 billion or 77% was attributable to office furniture products and $0.5 billion or 23% was attributable to hearth products.
An important element of the Corporation's success has been its member-owner culture, which has enabled it to attract, develop, retain and motivate skilled, experienced and efficient members(i.e., employees). Each of the Corporation's eligible members has the opportunity to own stock in the Corporation through a number of stock-based plans, including a member stock purchase plan and a profit-sharing retirement plan, which drives a unique level of commitment to the Corporation’s success throughout the workforce.
Strategy
The Corporation's strategy is to build on its position as a leading manufacturer of office furniture and hearth products in North America and pursue select global markets where opportunities exist to create shareholder value. The components of this growth strategy are to introduce new products, build brand equity, provide outstanding customer satisfaction by focusing on the end-user, strengthen the distribution network, respond to global competition, pursue complementary strategic acquisitions, enter markets not currently served and continually reduce costs.
The Corporation’s strategy has a dual focus: working continuously to extract new growth from its core markets while identifying and developing new, adjacent potential areas of growth. The Corporation focuses on extracting new growth from each of its existing businesses by deepening its understanding of end-users, using new insights gained to refine branding, selling and marketing and developing new products to serve them better. The Corporation also pursues opportunities in potential growth drivers related to its core business, such as vertical markets or new distribution models.
Products and Solutions
Office Furniture
The Corporation designs, manufactures and markets a broad range of office furniture systems and seating across a range of price points. The Corporation's portfolio includes panel-based and freestanding furniture systems and complementary products such as seating, storage and tables. The Corporation offers a complete line of office panel system products and freestanding desks, classroom solutions, bookshelves and credenzas in order to meet the needs of a wide spectrum of organizations. The Corporation offers a variety of storage options designed either to be integrated into the Corporation's office systems products or to function as freestanding furniture in office applications. The Corporation's seating line includes chairs designed for all types of office work. The chairs are available in a variety of frame colors, coverings and a wide range of price points.
To meet the demands of various markets, the Corporation's products are sold under the Corporation's brands – HON, Allsteel, Maxon, Gunlocke, Paoli, HBF, artcobell, Midwest Folding Products, American Desk, basyx by HON, Lamex and ERGO, as well as private labels.
Hearth Products
The Corporation is North America’s largest manufacturer and marketer of prefabricated fireplaces, hearth stoves and related products, primarily for the home, which it sells under its widely recognized Heatilator, Heat & Glo, Majestic, Monessen, Quadra-Fire, Harman Stove, Vermont Castings and PelPro brand names.
The Corporation’s line of hearth products includes a full array of gas, wood and pellet burning fireplaces, inserts, stoves, facings and accessories. Heatilator, Heat & Glo, Majestic and Monessen are brand leaders in the two largest segments of the home fireplace market: gas and wood fireplaces. The Corporation is the leader in “direct vent” fireplaces, which replace the chimney-venting system used in traditional fireplaces with a less expensive vent through the roof or an outer wall. In addition, the Corporation is the leader in wood and pellet-burning stoves and furnaces with its Quadra-Fire, Harman Stove, Vermont Castings and PelPro product lines which provide home heating solutions using renewable fuels.
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My Perspective
Since I currently own shares of Steelcase Inc. and I am very satisfied with that investment, I believe an investment in HNI Corp would fit in very well. I like the idea that this company's list of shareholders includes many of its employees. It assures that my interests line up with the interests of both management as well as the workers of the company and that what's in their best interest is the same as my best interests.
Like many of my other investments, I intend to begin by accumulating a small position in this company and then adding to that position through dividend reinvestment, sales of options, and additional purchases with limit orders as prices become favorable. I also expect to hold and grow this position for a very long time. Perhaps years.
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