When was the last time you got a 35% raise from your boss?
After you stop laughing and rolling on the floor, consider
this fact:Mattel (
) declared a 35% dividend increase at the beginning of this year,
raising the quarterly payout to 31 cents a share from 23
The increase brought the current annualized yield to about
Mattel's earnings have been a model of consistency in recent
quarters -- up 20% vs. the year ago in Q4, 20% in Q1 and 22% in
the second quarter.
The Q2 results were especially impressive. The earnings of 28
cents a share were a third greater than the 21 cents the Street
Like most toy makers, Mattel's second half running up to
Christmas is seasonally the strongest.
The three-year and five-year earnings stability factors are 11
and 19 on a scale of 0 (calmest) to 99 (wild).
Although Mattel is known for its longstanding Barbie dolls,
the company has benefited from new products. Monster High, a toy
line that includes dolls that represent the offspring of famous
monsters, was launched in 2010 and is doing well.
On Tuesday, the company said it plans to introduce another new
product in 2012. Mattel offered no details but said it would
share information in October.
Pretax margin, which fell as low as 8% in recessionary 2008,
was 15.5% last year -- the best since 2003. Return on equity, a
measure of financial efficiency, was 29% last year, the best in
at least nine years.
The Composite Rating, a gauge that combines all five IBD
ratings into a single number, is 91.
Revenue growth continues to be the drawback for Mattel.
Single-digit percentage gains have been the rule for the past 14
In Q2, sales were flat, topping the 3% decline analysts
Mattel reports in U.S. dollars, and a strong dollar hurt
results. For example, international revenue fell 1% in Q2 but
that included a 10-percentage-point hit from currency
Revenue outside the U.S. account for about half of Mattel's
Fund participation has fluctuated in a narrow range over the
past four quarters. In Q1, the Vinik Asset Management hedge fund
opened a position in the stock.