High Dividend Yield Toy Stock, MAT

Reading around the dividend stock blogs, I saw MyDividendPipeline purchased some Mattel (MAT) with a high yield with the falling stock price.  I used to own Mattel (MAT), so maybe it is time to take a look.  What can be better than a high dividend yield toy stock?

High Dividend Yield Toy Stock MAT

Who is our Toy Dividend Company?

Mattel (MAT) is located in El Segundo, California and was founded in 1945.  They make and sell toys all over the world.  They have well-known brands such as Barbie, Matchbox cars, Minecraft toys, Fisher-Price, and many other brands.  With 2 sons, we have lots of toys, so we know a number of these brands very well.

History of my Dividend Toy Stock

The last time I purchased Mattel (MAT), it was trading at $26.58 a share.  Then I was forced to sell it at $30.74, making a nice little profit.  The stock continued to go higher and I wasn’t willing to pay that much for it.  Now, I can buy back the same stock at $21.75.  I know we should not care where a stock has been, only where it is going.  But, being that I am human, buying it back even cheaper than were I sold it would feel nice.


Why is the Stock Cheap?

We are in the off season for Mattel (MAT) and they lost money this past quarter.  Since it is the off season, they lose money in their off seasons.  However, they lost a lot more money.  They lost $94 million this quarter last year, and this year, they lost even more, at $113 million.  That is 20% more money lost this quarter compared to last year.  They have been struggling for years, and this continues the momentum.

High Dividend Yield Toy Stock

Because of the share price, this is one high dividend yield toy stock.  It is playing with a nice 7.0% yield.  That is a nice bit of cash flow to me.  There is a couple of problems with their dividend.  The dividend payment is greater than the earnings and cashflow.  Which means, every time they pay a dividend, they have less money in their bank account.  Looking at a couple stock sites such as Seeking Alpha, their EPS are in the $0.79 to $0.92 and have a dividend payment of $1.52 per share.  That is bad dividend coverage, or lack thereof.  This makes the dividend unstainable, especially with earnings falling.  This one falls into, the larger the risk, the larger the reward.

Is this Purchase Worth the Risk?

On a yearly basis, they are making money.  If they can turn themselves around, this stock price could easily double and be a fantastic dividend purchase.  If they don’t, they are still making money.  The stock price will only fall to a reasonable PE ratio, which I am guessing, is a 50% stock price decrease.  The reward is double the loss, plus a good dividend.  I am going to take the risk.

Mattel (MAT) Dividend Shares Purchased

On 4/24/17, I bought 15 shares of Mattel (MAT) for $331.20, including those commissions that toy with me.  Just to see if you are paying attention, I put more money on that toy in the picture than the shares I purchased.  With their current dividend, we will earn $22.80 per year. I made this a small purchase, because if I am wrong, then I only lose a small amount.  But if I am right, this could easily become $700 worth of stock with a great dividend.

Do you have a high dividend yield toy stock?  How about buying Mattel (MAT) for their risky dividend yield.  Please toy around with us and comment in the comment section below.

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Disclosure: MAT – We own shares.

 

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3 thoughts on “High Dividend Yield Toy Stock, MAT

  1. Mattel’s dividend yield is all over the place. I wrote a guest post on this and their performance since 2000. They do provide a nice yield but it is erratic at best.

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