Hasbro: More than Toys

05/12/2017 2:50 am EST


Charles Carlson

Editor, DRIP Investor

While Hasbro (HAS) is often seen purely as a toy company, it is truly an entertainment concern with exposure to not only toys and games but also television, movies, digital gaming, and consumer products, notes Chuck Carlson, dividend expert and editor of DRIP Investor.

The company seems to be taking a page from the winning playbook at Disney (DIS). In fact, it is a direct link with Disney — Hasbro has the licensing rights to such important Disney properties as Star Wars and Frozen  — that is helping to drive profit and revenue growth.

Hasbro has a rich stable of franchise brands, including Nerf, My Little Pony, Playdoh and Monopoly. The company’s gaming brands include Jenga, Taboo, Operation, Scrabble, Clue, Trivial Pursuit, and Dungeons & Dragons.

The company’s products built around partner brands should get a big boost from a heavy slate of movies this year.

Disney’s Beauty and the Beast has been another blockbuster for Disney and will be an important driver for Hasbro’s partner brands this year.

Also, another installment of the Star Wars franchise set for the end of this year will help drive demand for Hasbro products based on the franchise.

Other movies this year that will fuel growth in partner and franchise brands include installments in the Guardians of the Galaxy, Transformers, and Spider-Man franchises.

I like the near- and long-term potential of these shares. In addition, with a market capitalization of nearly $13 billion, Hasbro is not without takeover appeal.

One long-running rumor has Hasbro merging with Mattel (MAT), although the companies’ fortunes have been going in different directions of late. Quite frankly, a tie-up with Disney, which needs to boost its consumer-products business, makes more sense. '

Even without a takeover, there is a lot to like with these shares. Dividend investors should like the 14% compound annual growth in the dividend in the last 10 years, including a 12% bump this year. The current yield is 2.3%.

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