Mattel's Stock Leads Toy Pack In Fundamentals


For toy companies, the first half of the year is the preseason.

Last year, for instance,Mattel ( MAT ) pulled in two-thirds of its 2012 revenue in Q3-Q4.

Given that reality, investors are probably better off focusing on annual earnings and sales more than the quarterly results in the first half of the year.

Mattel's three-year growth rate for earnings is 16%. The three-year earnings stability factor is outstanding at 2. Revenue grew 5% in the same period.

That might not sound like much, but chief rivals in the Leisure-Toys/Games/Hobby group trail Mattel.Hasbro 's ( HAS ) three-year growth rates for earnings and revenue are 2% and 1%.Jakks Pacific ( JAKK ) has no growth rate because of a mix of declines and losses.

Income investors, when looking within an industry group or sector, should zero in on the stocks with the strongest fundamentals and technicals.

Mattel has a strong lineup of proven brands, including Barbie, Hot Wheels, Dora the Explorer and American Girl. In early 2012, Mattel wrapped up the acquisition of HIT Entertainment, bringing Thomas & Friends and Bob the Builder into the Mattel tent.

Return on equity, a measure of financial efficiency, was 30.9% last year -- the best among the six stocks in the toy industry group.

Pretax margin was 17.1%, again the best in its group.

The California-based company pays a quarterly dividend of 36 cents a share. The annualized yield is 3.2%, well above the S&P 500's 2.4% yield.

At the April 17 Q1 earnings call, CEO Bryan Stockton said the company has "a strong pipeline of new brands and products" that will arrive in the second half of this year.

The stock has a Composite Rating of 93 out of a maximum 99.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Investing Ideas

Referenced Stocks: HAS , JAKK , MAT

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