Morningstar Rating

Stock Research and Analysis

by Jaime M. Katz, CFA

Bulls Say

Mattel's size allows it to fund new products, expand into high-growth international markets, and make smart acquisitions, while its large portfolio of brands lends itself to scalable expansion in new categories like digital and in new franchises.
As the largest player in the toy industry, Mattel remains one of the preferred licensing partners for important tie-ins with entertainment companies in movies and television.
Mattel's capital-allocation program could be compelling for income investors. The company has returned $1.8 billion to shareholders in dividends over the past five years. Read more 

Bears Say

The target market for traditional toy manufacturers continues to shrink as a percentage of total toy sales, as technology plays a more predominant role in product selection.
The consolidated retail channel leaves Mattel at the mercy of its three largest outlets, which could affect profits.
Mattel's inability to capture lucrative entertainment and licensing contracts could cause competitors to become relatively more attractive. In addition, the entire industry could become more competitive if smaller players push to gain scale through aggressive promotions. Read more 

Management

Although leadership at Mattel has recently changed, the principles that led the company to become the biggest toy company globally remain intact, and we believe the overall capital-allocation scheme is exemplary. The company maintains a disciplined   Read more 

Profile

Mattel manufactures and markets toy products that are sold to its wholesale customers and directly to retail consumers. The company offers products for children and families,  Read more 

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