Hasbro: Playful Profits

08/07/2013 7:00 am EST


David Fish

Executive Editor, Moneypaper

The great thing about dividend reinvesting plans (DRIPs) is that they help investors to take advantage of their most important advantage, which is time, observes David Fish of Direct Investing.

Relatively small investments add up over many years, compounded by growing dividends and stock prices, and the good news is that many of the best companies offer these plans.

It may not exactly be child's play, but sometimes the simplest, most easily understood businesses provide the safest path to personal prosperity.

That's true even when the market seems to be expensive and advisors are pitching complicated strategies to gain minute short-term advantages, which may not pan out in the long run.

Our latest featured DRIP idea is Hasbro (HAS); founded in 1923, it is one of the world's largest toy makers, whose brands include Playskool, Tonka, Milton Bradley, Parker Brothers, Monopoly, Scrabble, Trivial Pursuit, Easy Bake, Mr. Potato Head, G.I. Joe, Super Soaker, and Transformers.

Hasbro is also benefiting from its licensing deals with Marvel Entertainment, which produces movie series such as Spiderman, The Fantastic Four, and Transformers, and Electronic Arts, which produces digital games based on its products.

Consensus estimates call for Hasbro to earn about $2.89 per share this year and $3.21 in 2014, compared with $2.81 in 2012.

Ongoing share buybacks have reduced the number of shares outstanding from 200.1 million shares outstanding in 1997 to 130.3 million today.

The dividend has been increased from 12 cents per share in 2003 to $1.60 now, providing a 3.4% yield.

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