Acquisition MAT

Mattel Company LogoI’ve been pretty quiet these last few months on the acquisition side of things primarily due to market unknowingness. Though with new President elected and nothing pending for market correction I went ahead and added to my current ownership of Mattel, Inc. (MAT). Don’t get me wrong, the company has been a total dog in my portfolio these last few years with unmoved dividend growth for quite some time now. But even with year over year downtrending revenues this acquisition serves as a good example to dollar cost average in order to build on my current position. There is no doubt about it, the company has been going through some tough times, but also there is no doubt about the great brands it owns.

Company Overview: 

Mattel, Inc. was founded in 1945 and it is headquartered in El Segundo, California.  Essentially, the company designs, manufactures, and markets a variety of toys and games under some of the most powerful children brands worldwide. Brands include Mattel, Barbie, Hot Wheels, Matchbox, Yu-Gi-Oh, Batman, Justice League, Megaman, Fisher-Price, View-Master, Sesame Street, Barney, Dora the Explorer, Winnie the Pooh, Power Wheels, American Girl, Thomas the Tank Engine and many more. It is the largest toy and game manufacturer in the United States. Additionally, the company sells its products directly to consumers via its catalog, website, proprietary retail stores, directly to retailers, including discount and free-standing toy stores, chain stores, department stores, retail outlets to wholesalers and through agents and distributors.

Statistics:

  • Dividend Yield: 5.8%
  • 3Yr Dividend Growth Rate: 1.8%
  • Payout Ratio: 106.3%
  • P/E: 25.0
  • Consecutive Years of Dividend Raises: 0
  • Dividend Payout: Quaterly

I purchased 75 shares for the price of $26.29 for a total investment of $1,971.75 adding $114.00 to my annual dividend income.

It is the 1st time I am initiating a stock acquisition this year. This transaction is my additional purchase of MAT shares into the portfolio. As of today, I now hold a total of 126.24 shares of the company. Additionally, MAT ownership stake represents to be around 3.4% of my whole portfolio value.

Conclusion:

The 12-month dividend income increases to $2,964.

Thank you for reading & have a great day!

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4 Comments

  1. Andrew on February 23, 2017 at 19:53

    Hi Dividend Vet,

    Thanks for the post. How are you justifying the payout ratio on MAT for future dividend increases and yield? Are you expecting EPS to grow and give the payout ration a more sustainable percentage? Just curious what your thoughts on that were. Thanks!

    -Andrew

    • DividendVet on February 25, 2017 at 14:24

      Hey Andrew, I am glad you found some value, but to answer your question, while the payout ratio is much, much higher than I would originally like this purchase represents a much longer term holding simply based on the amazing brands the company holds. The yield is already there even without the dividend raises. Plus, the company has been going through a tough transition where the revenue and price of stock has been depressed for a while. I hope that gives you some insights to this purchase as this is much more speculative than I would originally like.

      Take care.

  2. Dividends 4 Future on February 24, 2017 at 17:09

    Hi DV,

    Is MAT for capital appreciation and are you planning on weathering the storm, payout seems awful high.

    What are your thoughts?

    Thanks, D4F

    • DividendVet on February 25, 2017 at 14:39

      For the time being I am planning on holding my stake and keep on collecting those dividends as I think the company has great brands, though we will see what happens in the future. If appreciation does jump up past $36, I might be more willing to trade in for HAS who has been just on fire.

      Thanks for stopping by!

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