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

Disney should also help Hasbro, Inc. (NASDAQ:HAS) address the current weak demand for Boys Toys that is plaguing its sales. Stars Wars and Marvel characters such as Iron Man and Spiderman tend to be popular. This also gives them an edge over Mattel in this category as well.

So what’s in it for Disney? Hasbro and Mattel producing toys for its licensed characters and movies provides promotion, marketing, and increased demand for its films. It also provides a nice paycheck, with Hasbro alone paying up to $225 million in guaranteed payments to Disney for upcoming Star Wars related films. This is in addition to the $80 million in royalties that Hasbro will pay Disney in relation to Marvel related characters. Disney gets payed royalties and gets great marketing and promotion at the same time, which is good for them no matter how well received the future movies are.

The bottom line

Both Hasbro and Mattel, Inc. (NASDAQ:MAT) make good investments, as they both offer income-generating dividend yields over 3%. A pick-up in Disney-related movies and characters should benefit both companies and possibly help to offset declining sales. Hasbro, Inc. (NASDAQ:HAS) seems to have the advantage with Disney, snagging rights to Star Wars and Marvel, which will theoretically boost demand for toys marketed and targeted toward boys.

Mattel, however, seems to have a better track record for earnings and revenue growth, so it shouldn’t be counted out, either. The company also appears to have a stronger, less-leveraged balance sheet as well, and with a market cap over twice that of Hasbro’s, they may also be a little safer as an investment overall. Mattel also looks cheaper going forward in relation to earnings.

Mattel also seems to have better growth prospects internationally than Hasbro going forward as well, after boosting its share of the international toy market by 6.3% in the period from 2008 to 2012. Hasbro lost 4.7% of its share in the same time period, according to Euromonitor International’s data.

Mattel currently looks like the better bet.

The article Which Toy-Maker Is the Better Bet? originally appeared on Fool.com and is written by Joseph Harry.

Joseph Harry owns shares of Walt Disney (NYSE:DIS). The Motley Fool recommends Hasbro, Mattel, and Walt Disney. The Motley Fool owns shares of Hasbro and Walt Disney. Joseph is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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