MAT  Mattel Inc.

Exchange

NASDAQ

Sector

Consumer Non-Durables

Industry

Recreational Products/Toys

Market Cap.

4.84B

Vuru Grade

49.79/100

Current Price

$14.12
-1.46 (-9.37%)

Growth Price

$14.68
Fairly valued

Stability Price

$9.60
Overvalued by 32.02%

Company Metrics

  • P/E 20.26
  • P/S 1
  • P/B 2.58
  • EPS 0.7
  • Cash ROIC 14.83%
  • Cash Ratio 0.58
  • Dividend 0 / 0%
  • Avg. Vol. 9.80M
  • Shares 342.78M
  • Market Cap. 4.84B

Company Description

Mattel, Inc., together with its subsidiaries, engages in the design, manufacture, and marketing of various toy products worldwide. Its products comprise fashion dolls and accessories, vehicles and playsets, and games and puzzles. The company offers its products under Mattel Girls and Boys brands, including Barbie, Polly Pocket, Little Mommy, Disney Classics, Monster High, Hot Wheels, Matchbox, Bat... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Hasbro Offers to Buy Mattel; What It Means For Christmas
U.S. News & World Report - Nov 13, 2017
Horizontal mergers, like Office Depot-Staples and Walgreens-Rite Aid, sometimes get more undeserved scrutiny from regulators than vertical ones, like the current Time Warner Inc (TWX) - AT&T Inc. (T) deal, which could actually survive if Time Warner ...
Hasbro reportedly offers to buy Mattel - Chicago Tribune
Mattel stock jumps more than 20% after a report of Hasbro's takeover offer - Los Angeles Times
Mattel: Some Takeover Considerations
Seeking Alpha - Nov 16, 2017
Mattel (NASDAQ:MAT) shares are up from a late October low of $12.7 to trade as high as $18.8 as Hasbro (NASDAQ:HAS) takeover speculation once again makes headlines.
Mattel Drops on Report That It Rebuffed Approach From Hasbro - Bloomberg
Exclusive: Mattel snubs Hasbro's latest acquisition approach - sources - Reuters
3 Stocks to Watch on Thursday: Mattel, Inc., NetEase Inc (ADR) and RH
Investorplace.com - Nov 16, 2017
It was a dismal day for U.S. equities as the dollar weakened and energy stocks fell 1.2%. The S&P 500 Index and Dow Jones Industrial Average each declined 0.6%, while the Nasdaq Composite gave back 0.5% Wednesday.
Mattel Inc. Shares Slump 15% as Investors Head for the Door
Motley Fool - Oct 27, 2017
Shares of Mattel Inc. (NASDAQ:MAT), a manufacturer and marketer of toy products with well-known brands such as Barbie, Hot Wheels, and Fisher-Price, are down 15% as of 12:15 p.m.
Mattel crashes after missing big on earnings and suspending its dividend - Business Insider
Mattel: A Mistake To Suspend The Dividend - Seeking Alpha
Mattel Surges After Dismal Results Lead to Takeover Speculation
Bloomberg - Oct 30, 2017
The report followed a surprisingly sharp sales decline at Mattel last quarter. The toy company, which makes Barbie and Fisher-Price, suspended its dividend and escalated a cost-cutting push to cope with the slump.
Mattel: The Turnaround Story Still Intact? - Seeking Alpha
Mattel Stock Surges Amid Sale Speculation - Los Angeles Business Journal
Hasbro Sets Its Sights on Mattel
Wall Street Journal - Nov 10, 2017
Hasbro Inc. has made a takeover offer for rival Mattel Inc., according to people familiar with the matter, a potential combination that would unite the two biggest U.S.
Hasbro makes buyout offer for toy rival Mattel: WSJ - CBS News
Mattel Surges on Report That Hasbro Discussed Acquisition - Bloomberg
Robert Olstein Buys Mattel Inc, Janus Henderson Group PLC, Spirit Airlines Inc ...
Nasdaq - Nov 9, 2017
Robert Olstein added to the holdings in Mattel Inc by 375.45%. The purchase prices were between $14.52 and $21.63, with an estimated average price of $17.96.
Traders Secrets on General Motors Company (GM), Mattel, Inc. (MAT)
StockNewsJournal - Nov 20, 2017
Mattel, Inc. (NASDAQ:MAT), maintained return on investment for the last twelve months at -13.45, higher than what Reuters data shows regarding industry's average.
Investors Spotlight: General Motors Company (GM), Mattel, Inc. (MAT) - TRA
Wells Fargo: Now's The Time For A Hasbro-Mattel Merger
Benzinga - 11 hours ago
After discussions of a potential Mattel, Inc. (NASDAQ: MAT) and Hasbro, Inc. (NASDAQ: HAS) tie-up were first reported in the Wall Street Journal earlier this month, Wells Fargo is throwing their hat in the "for" column.
Mattel, Inc. Stock Is a Buy If You Don't Mind the Wild Ride
Investorplace.com - Nov 2, 2017
In other words, there are plenty of options out there for kids outside of the traditional toys Mattel makes. That is why Mattel's weakness is broad and across every toy category. Barbie revenue fell 6%. Other Girls revenue (think DC Super Hero) fell 40 ...
What the Technicals Say About Mattel, Inc. (MAT) - Economic News
Are Mattel, Inc. (MAT)'s Recent Ownership and Insider Trends a Sign of Things ... - StockNewsGazette
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for MAT to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate MAT's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$14.12 Current Price

$14.68 Growth Price (DCF)

Fairly valued


Growth Rate Assumed by Market: 3.30%


Future Free Cash Flow Growth Rate: 5.2%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$9.60 Stability Price (EPV)

Overvalued by 32.02%


Discount Rate: 15.0%

$24.74 Book Price

Undervalued by 75.19%


Inconsistent Cash Return on Invested Capital over the past 5 years

MAT has somewhat efficiently invested its financial resources in buildings, projects, and equipment. However, there has been some inconsistency from year-to-year. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

MAT has created $14.83 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 1.06B 446.37M 628.11M 480.38M 332.32M
divided by
Invested Capital 3.48B 4.35B 4.66B 4.01B 4.12B
Cash ROIC 30.41% 10.25% 13.47% 11.97% 8.07%

Excellent Return on Equity over the past 5 years

Over the past 5 years, MAT has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

MAT has generated $19.45 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 776.46M 903.94M 498.87M 369.42M 318.02M
divided by
Stockholders' Equity 3.07B 3.25B 2.95B 2.63B 2.41B
Return on Equity 25.32% 27.80% 16.92% 14.03% 13.21%

Excellent Business Performance over the past 10 years

MAT has been able to maintain profitability in good times and bad. This could mean MAT has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

MAT has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 413.90M 237.53M 824.55M 391.32M 473.78M 1.06B 446.37M 628.11M 480.38M 332.32M

Weak Balance Sheet

MAT's financial position is not ideal. The key is to check whether MAT is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 901.15M 617.69M 1.12B 1.28B 1.37B 1.34B 1.04B 971.65M 892.81M 869.53M
Current Assets 2.59B 2.39B 2.55B 3.23B 3.44B 3.56B 3.38B 3.19B 3.20B 2.94B
Total Assets 4.81B 4.68B 4.78B 5.42B 5.67B 6.53B 6.44B 6.72B 6.55B 6.49B
Current Liabilities 1.57B 1.26B 1.06B 1.35B 1.04B 1.72B 1.05B 1.09B 1.65B 1.51B
Total Liabilities 2.50B 2.56B 2.25B 2.79B 3.06B 3.46B 3.19B 3.77B 3.92B 4.09B
Stockholder' Equity 2.31B 2.12B 2.53B 2.63B 2.61B 3.07B 3.25B 2.95B 2.63B 2.41B
Current Ratio 1.65 1.89 2.41 2.39 3.31 2.07 3.22 2.93 1.94 1.95
TL-to-TA 0.52 0.55 0.47 0.51 0.54 0.53 0.50 0.56 0.60 0.63

Consistent Reinvestment of Profits over the past 10 years

MAT has consistently retained profits. This may put MAT in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, MAT can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 1.98B 2.09B 2.34B 2.72B 3.17B 3.52B 3.92B 3.90B 3.75B 3.55B
Retained Earnings Growth - 5.47% 12.18% 16.29% 16.44% 10.96% 11.46% -0.56% -3.86% -5.35%

Competitive Industry over the past 10 years

MAT is likely operating in an industry with medium to low barriers to entry. This may mean that MAT doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that MAT invests heavily in R&D and Sales, General & Administrative expenses.

Only $9.68 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 599.99M 379.64M 528.70M 684.86M 768.51M 776.46M 903.94M 498.87M 369.42M 318.02M
divided by
Revenue 5.97B 5.92B 5.43B 5.86B 6.27B 6.42B 6.48B 6.02B 5.70B 5.46B
Net Profit Margin 10.05% 6.41% 9.74% 11.69% 12.26% 12.09% 13.94% 8.28% 6.48% 5.83%

Strong Pricing Power over the past 10 years

MAT has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$49.51 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 2.78B 2.68B 2.71B 2.95B 3.15B 3.41B 3.48B 3.00B 2.81B 2.55B
divided by
Revenue 5.97B 5.92B 5.43B 5.86B 6.27B 6.42B 6.48B 6.02B 5.70B 5.46B
Gross Margin 46.52% 45.36% 49.99% 50.46% 50.20% 53.10% 53.65% 49.82% 49.21% 46.81%

Medium Capital Intensity over the past 10 years

MAT has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

40.39% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 146.63M 198.81M 120.49M 136.65M 190.91M 219.05M 252.05M 260.46M 254.18M 262.19M
divided by
Net Income 599.99M 379.64M 528.70M 684.86M 768.51M 776.46M 903.94M 498.87M 369.42M 318.02M
Capital Expenditure Ratio 24.44% 52.37% 22.79% 19.95% 24.84% 28.21% 27.88% 52.21% 68.81% 82.44%

Very Strong Dividend History over the past 10 years

MAT has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests MAT is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 272.34M 268.85M 271.35M 291.26M 316.50M 423.38M 494.37M 514.81M 515.07M 518.53M
divided by
Shares Outstanding 390.61M 363.19M 361.51M 364.57M 348.42M 346.16M 347.46M 340.77M 339.75M 344.23M
Dividend Paid Per Share 0.70 0.74 0.75 0.80 0.91 1.22 1.42 1.51 1.52 1.51
Price at Year End 15.97 14.25 18.74 24.46 27.49 35.84 47.82 30.73 27.44 27.55
Dividend Yield 4.37% 5.19% 4.01% 3.27% 3.30% 3.41% 2.98% 4.92% 5.52% 5.47%

Strong History of Stock Buybacks over the past 10 years

MAT has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 390.61M 363.19M 361.51M 364.57M 348.42M 346.16M 347.46M 340.77M 339.75M 344.23M
Stock Bought Back - 7.55% 0.46% -0.84% 4.63% 0.65% -0.37% 1.96% 0.30% -1.30%
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