Another drawback is that Iger is retiring in 2016. His annual compensation of $19.82 million is the main reason the corporate governance risk score is a high 9 instead of a 4 as it is for other risk issues. But Iger deserves it as he took over a troubled Disney in 2005 after CEO Michael Eisner filled the Board with cronies like his lawyer, his children’s principal, and other questionable seats. Iger has also been instrumental in the purchase of Marvel and Lucasfilms.
The stock is close to 52 week highs. Its median price target has been raised from $62.50 in March to $72.50 now. Analysts are bullish with 7 Strong Buys, 15 Buys, and 8 Holds.
The All-American cutie
Mattel, Inc. (NASDAQ:MAT) makes Barbie, Hot Wheels, and Fisher-Price toys but their most popular brand is the American Girl doll. They have their own stores dedicated to all things American Girl (with personal shoppers, yet!) located in high-end malls. These dolls and their accoutrements are pricey. Example: one can buy a scaled down VW bug for their 1970’s era Julie Allbright doll for the price of the VW bug I bought in college.
Cute has been working for Mattel, Inc. (NASDAQ:MAT) offsetting boy brands’ underperformance. Boy brands have been so sluggish Mattel is teaching mommy bloggers how to play with boys’ toys to encourage mom purchases for their boys.
Mattel, Inc. (NASDAQ:MAT) is trading at a trailing P/E of 19.44 with a yield of 3.30%. That dividend has grown over 10% annually. Hasbro, Inc. (NASDAQ:HAS) has a higher yield of 3.70% but comes with a short interest of 16.30% compared to a .90% short interest in Mattel, Inc. (NASDAQ:MAT). It also has less exposure to girl brands.
The stock is up 37.91% over the last year. The median price target at $49.00 gives 10% upside, and Argus initiated coverage on June 13 with a buy.
The Foolish Takeaway
Mattel, Inc. (NASDAQ:MAT) is a buy during its usual summer slump with the highest yield of these and a keen understanding of “cute.” L Brands Inc (NYSE:LTD) is also a buy, especially since their stock hasn’t moved up as much and new freestanding PINK stores should do brisk business. It also has that insider conviction. The Walt Disney Company (NYSE:DIS) has moved so far, so fast that it’s pricey here and the yield isn’t as winsome as it was. Wait for a significant pullback to buy Disney.
The article How Playing it Cute Makes You Money Now originally appeared on Fool.com and is written by AnnaLisa Kraft.
AnnaLisa Kraft has no position in any stocks mentioned. The Motley Fool recommends Mattel and Walt Disney. The Motley Fool owns shares of Walt Disney. AnnaLisa 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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