Let’s have a Ball with these Toy Dividends. MAT or HAS

You can read out new High Dividend Yield Toy Stock purchase with MAT.

Well, we are in earning session again, although this is the first one for this site.  One fun thing that happens is increased volatility with share price. Especially when people are trying to trade the earnings. This offers a lot of opportunity for buying long-term holdings at an on-sale price. Now, let’s have a ball with these toy dividends.

Toy Balls

Let’s have a Ball with these Toy Dividends

Now let’s have some fun picking best in breed in toys. We have Mattel (MAT) and Hasbro (HAS) to choose from. For dividend yield, Mattel (MAT) is about double of Hasbro’s (HAS), giving the win to Mattel (MAT), even though it implies added risk. Mattel (MAT) has a P/S ratio of 1.3 versus 2.1 with Hasbro (HAS), giving Mattel (MAT) another win with being cheaper. Mattel (MAT) has more revenue and earnings than Hasbro (HAS), giving Mattel (MAT) the win with being larger.  They each have their own toys that are best in their own groups, making this a tie. Hasbro (HAS) has better licensing with Disney (DIS) brands, such as Frozen and Star Wars, giving the brand win to Hasbro (HAS). Hasbro (HAS) wins with increasing revenue while Mattel (MAT) has been shrinking, giving Hasbro (HAS) the win.


The Winner

Mattel (MAT) wins 3 categories and Hasbro (HAS) wins 2, making Mattel (MAT) best in breed. And I do not think brands like Hot Wheels, Matchbox, Fisher Price, or Barbie’s are going anywhere anytime soon. There are popularity cycles that come and go. They also have many other brands. As a plus, the price today is much cheaper than $47 a share they were trading at 14 months ago.

One of the largest times of year to buy toys is in December. Can you guess why? Mattel (MAT) is scheduled to report earnings after the close. Mattel (MAT) is down over $1 a share while we were making our purchase. This price offers a dividends yield of 5.7%. This is a nice yield even if the stock price goes down more after the report.

The Struggle

Now Mattel (MAT) has been struggling a little bit, which is part of the reason they have been trading down. The whole market has kind of been trading down recently too. Although, with their earnings per share being less than their dividend payment, this is an area for concern. While this is not good, it can be maintained for a short time. The company realizes this and knows this needs to be fixed. They have talked about their plans to fix this in their statements.

There are benefits in the world for them right now. The toys they make are made from stuff, such as plastics, metal, cardboard, etc. It turns out they are not made by magic, which is good, because wizard salaries are way up. Currently, commodity prices are down, which will save them money. Even if you cannot fully control something, it is nice to be in your favor. Also, the unemployment number is down. While we could write a number of post to argue whether the number is accurate or should it be better, anything that makes their customers better off is good for them.  They have a plan to improve operations, have cheaper supplies, and customers that are better off.  This will lead to greater profitability, which will lead to better dividends, which will lead to more toys for me.

What we Bought

So, let’s quit toying around and see what we did. We purchased 10 shares of Mattel (MAT) for $272.75, including the fun commissions we pay. We will get $15.20 a year in dividends to start, although we expect a slow start to dividend increases for a while.  A 5.7% dividend yield is “not too shabby” (Adam Sandler).

We are having a ball with these toy dividends.  Are you doing the same?  Please feel free to comment below.

Disclosure:

  • MAT – We own shares
  • HAS – We do not own shares

 

 

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