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Hasbro, Inc. (HAS), Mattel, Inc. (MAT): Which Toy-Maker Is the Better Bet?

Hasbro, Inc. (NASDAQ:HAS)Classic games such as Monopoly are easily recognizable by most children and adults alike. The company behind these products and other iconic brands of games and toys, Hasbro, Inc. (NASDAQ:HAS) competes mostly with its main rival, Mattel, Inc. (NASDAQ:MAT), for dominance of the toy industry. Mattel, Inc. (NASDAQ:MAT) also has its fair share of iconic toys, such as Barbies. Toy companies usually constitute a solid long-term investment, so which company offers more value?


P/E Forward P/E Dividend (Yield) Market Cap (Billions)
HAS 18.58 14.65 1.60 (3.40%) $6.06
MAT 18.87 13.93 1.44 (3.30%) $14.58

Data provided by Yahoo! Finance 7/22/2013

Both companies trade at similar valuations in relation to earnings, and also offer comparative dividends. One noticeable difference is size, with Mattel, Inc. (NASDAQ:MAT) carrying over twice the market cap as Hasbro, Inc. (NASDAQ:HAS). So what about comparative financial strength?

Both companies contain extremely liquid balance sheets, but Hasbro, Inc. (NASDAQ:HAS) is more leveraged than Mattel, Inc. (NASDAQ:MAT). Looking at earnings and revenues, an investor can also clearly see Mattel’s leadership in growth when compared to rival Hasbro:

Aligning with the House of Mouse…

Another stalwart in the consumer discretionary sector is The Walt Disney Company (NYSE:DIS). It only makes sense that the nation’s largest toy-makers would align themselves with Mickey Mouse and other popular Disney-owned brands, such as Star Wars and the assorted Marvel characters. Both Hasbro, Inc. (NASDAQ:HAS) and Mattel, Inc. (NASDAQ:MAT) have a symbiotic relationship with Disney that is very important for both current and future prospects.

Mattel is looking to soak up some success from upcoming The Walt Disney Company (NYSE:DIS) movies such as “Planes” which may help boost sales amongst boys, as well as upcoming movies like “Frozen” which features a heroine that will hopefully translate into better Barbie sales — which have been struggling as of late.

If the past is any indication, a successful string of The Walt Disney Company (NYSE:DIS) movies will lead to a successful pick-up in sales for Mattel. Mattel, Inc. (NASDAQ:MAT)’s recent quarterly report was the opposite of impressive, failing to capture the same success that it did in the previous year with Batman merchandise when “the Dark Knight Returns” was released. Mattel has had a relationship with Disney since 1987, and also makes toys centering around classic Disney characters as well.

Hasbro, Inc. (NASDAQ:HAS) is also looking to get a pick-me-up from Disney. They may even get a much better boost than Mattel as well, after recently expanding their strategic merchandising relationship with the company. The expansion revolves around the Marvel and Star Wars brands, and will run until 2020. The agreeing terms will cover all film and television properties related to both franchises as well.

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