Hasbro, Inc. (HAS): Benefit From This Toy Giant’s Continued Digital Push

Page 2 of 2

For more conservative growth and income investors, Mattel, Inc. (NASDAQ:MAT) is probably a more compelling option. The company’s business has been performing better and has just as many, if not more, top brands. That includes such American icons as Barbie, Hot Wheels, and Fisher Price. Although the company hasn’t been as aggressive as Hasbro, it clearly hasn’t needed to be.

Another Way to Play

If the story behind Hasbro, Inc. (NASDAQ:HAS) is enticing but the lack of revenue and earnings progress is a bit too concerning, you might consider Hub partner Discovery Communications Inc. (NASDAQ:DISCA). Although the company’s PE is high at around 33, the bottom-line has gone from around $500 million a decade ago to almost $4.5 billion in 2012. That’s growth worth paying a premium for.

The Hub, though, is only one small part of this content creator. In addition to its namesake cable channel, it also owns The Learning Channel and Animal Planet. Its focus is unique, creating a notable barrier to entry for competitors and highly valuable content that can be sold to Internet distributors. Though not cheap, growth investors should take a close look. The Hub relationship augments these already strong cable brands, as does a similar relationship with Oprah Winfrey’s OWN channel.

An Expensive Turnaround

Hasbro, Inc. (NASDAQ:HAS) looks like it is making the right moves to differentiate itself over the long term. However, investors have afforded the stock a high valuation based on recent lackluster performance. While more aggressive income investors seeking a turnaround play might consider it, growth and income investors should favor Mattel, Inc. (NASDAQ:MAT). If the Hasbro story is compelling, though, another way to tag along for growth investors is to buy media partner Discovery Communications Inc. (NASDAQ:DISCA).

The article Benefit From This Toy Giant’s Continued Digital Push originally appeared on Fool.com and is written by Reuben Brewer.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Hasbro and Mattel. The Motley Fool owns shares of Hasbro. Reuben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Page 2 of 2