Hasbro has been around making and designing toys for a very, very long time. They've been able to do this by making the toys that kids want to both buy and play with. They have huge franchise brands and those brands have excellent brand loyalty. I believe that as long as there are kids, as well as adults like me that are kids at heart, Hasbro will be around to make the toys that all of us want to buy and play with.
- Hasbro’s Franchise Brands include the Little Pet Shop, Magic: The Gathering, Monopoly, My Little Pony, Nerf, Play-Doh, and Transformers.
- Hasbro Studios have produced over 1000 programs that are aired in over 180 territories around the globe.
- The company recently authorized a $500M share repurchase program.
- Hasbro has a great dividend but the payout ratio has risen from the mid 30% level to above the 70% level this year.
Hasbro, Inc. (HAS), together with its subsidiaries, provides children’s and family leisure time products and services worldwide. The company’s product offerings include various toys comprising boys’ action figures, vehicles and playsets, girls’ toys, electronic toys, plush products, preschool toys and infant products, electronic interactive products, creative play, and toy-related specialty products. It also offers games comprising action battling, board, off-the-board, digital, card, electronic, trading card, and role-playing games. The company’s franchise brands include LITTLEST PET SHOP, MAGIC: THE GATHERING, MONOPOLY, MY LITTLE PONY, NERF, PLAY-DOH, and TRANSFORMERS; and challenger brands comprise BABY ALIVE, FURBY, FURREAL FRIENDS, and PLAYSKOOL. Its gaming brands consists of BOP IT!, CONNECT 4, ELEFUN & FRIENDS, JENGA, LIFE, OPERATION, and TWISTER. In addition, the company produces television programming primarily based on its brands, as well as distributes such programming. Further, it distributes television programming to broadcasters and cable networks, as well as on various digital platforms, such as iTunes and Netflix. Additionally, the company develops mobile games comprising DRAGONVALE, NINJUMP, and PAPER TOSS; and is involved in the lifestyle licensing activities, digital gaming, and movie entertainment operations. It sells its products to wholesalers, distributors, chain stores, discount stores, mail order houses, catalog stores, department stores, and other traditional retailers, as well as Internet-based e-tailers. Hasbro, Inc. was founded in 1923 and is headquartered in Pawtucket, Rhode Island.
(Daily Chart) (Weekly Chart)
1yr Target $58.38
1yr Cap Gain 9.72%
1yr Tot Return 12.95%
Market Cap $6.87 Bil
3yr EarnGR -7.41%
5yr EarnGR 1.64%
3yr DivGR 16.77%
5yr DivGR 14.86%
Payout Ratio 69.91%
EPS (ttm) $2.46
EPS next yr $3.57
Earnings, as opposed to revenues, were expanding at a fairly brisk pace a decade ago but in the last couple of years they have actually declined. This has caused the earnings growth rate to fall from a ten year growth rate of 9.44% to a more recent 3 year growth rate of -7.41%. This is not how a great company should act. Earnings estimates, similar to those revenue estimates, are estimated to increase in 2014 to 49.30% and in 2015 to another 10.18%. While these are excellent numbers, they are estimates and not actuals. I like to base my investing decision on actuals.
Dividends are unique in that they have continued to increase during each of the past ten years. Dividend growth investors like myself like to see this statistic but if it's not supported by an equal increase in earnings, the numbers are suspect. In this case dividends were allowed to increase because of the company's decision to allow the payout ratio to increase. This can't go on forever and any further increases in the dividends are obviously dependent upon the successful realization of the analyst's earnings estimates going forward. These are not guaranteed numbers.
The weekly chart gives a little longer view of the company's stock price action. It also gives a more comprehensive view of the situation. In this chart we see a company that has risen nicely during 2013 but most likely peaked in April of this year at around 56 as it formed a topping pattern. With Christmas still 6 months away and no new tie-ins with any upcoming movies, this stock may fall under its own weight over the next few months. This is echoed in the MACD and the ADX indicators.
- Mattel Inc. (MAT)
- Hasbro Inc.
- LeapFrog Enterprises Inc.* (LF)
- JAKKS Pacific, Inc* (JAKK)
- Gaming Partners International Corp* (GPIC)
*Company does not pay dividends.
At this point I'm taking a wait and see on this stock. I like the toy and game industry, and I love that 3.23% dividend, but this may not be the best time to accumulate shares of this stock. I will continue to monitor this company and take a look at the fundamentals and technicals again in a couple of months.
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The Interactive Live Chart