Mattel, Inc. is a leading global children’s toys and games company that was founded in 1945 by Harold Matson, Elliot Handler, and Ruth Handler. Headquartered in El Segundo, California, US, Mattel has helped different generations of children to explore the world of wonder through play. The company boasts a portfolio of iconic brands that include Barbie, Hot Wheels, Fisher-Price, American Girl, UNO, Creatable World, and Pictionary Air. Mattel has a catalogue of its own titles as well as licensed partner brands such as WWE, Spirit Untamed, Shogun Warriors, Raspberry Kids, Minecraft, Ghostbusters, and Disney Toy Story.
Mattel’s beginnings were humble, but the timing was right. There was a baby boom in the aftermath of World War II and a practically non-existent toy industry. Within just 2 years, the company had produced its first hit product- the ‘Uke-A-Doodle’ toy based on a type of Portuguese lute instrument (ukulele). After its first major success, Mattel would engage in aggressive marketing strategies to promote its brand. It released the ‘Barbie’ brand in 1959, a toy that went on to be Mattel’s best-seller in history. Over the years, Mattel has continued to introduce new toys with mixed success. Since the turn of the millennium, the company has pursued growth by making strategic partnerships as well as dipping its toes in the M&A pool. Some of the company’s biggest deals include the acquisitions of The Learning Company and Mega Brands. The company has also inked various deals to produce themed toys for shows produced by production companies such as HiT Entertainment, Warner Bros, and Disney.
Mattel, Inc. is listed on the Nasdaq (NASDAQ: MAT). Its stock trades under the ticker MAT and is a component of the S&P 500. MAT stock is categorized in the Consumer Cyclical sector, under the Leisure industry.
Mattel Stock History
Mattel has never implemented any stock splits since 2000. MAT stock traded just above $10 at the turn of the millennium. The MAT shares gradually edged higher, peaking at circa $20 by April 2007.
However, the effects of the 2007/8 recession triggered a selloff that saw the MATTEL stock price tumble to lows of circa $10 by February 2009. The MATTEL plc share price would then recover impressively, rallying steadily to its all-time high just below $50 by December 2013. The MAT stock price failed to sustain those levels and embarked on a long-term downtrend that was overextended by the 2020 Great Lockdown. By April 2020, the stock had dipped to below $10, its lowest ever levels in the 21st century. MAT stock has since recovered and currently trades around $20, as of February 2022.
Mattel does not currently pay dividends. The toymaker made a corporate decision to do away with dividends in Q4 2017 so as to undertake strategic capital allocation plans. But a tough business environment has persisted, and there are no signs that MATTEL dividends per share will return anytime soon.
How to Trade Mattel Stock
Here are some of the factors to consider when trading MAT stock:
- Trade and Tariffs Agreements
Mattel has operations in 35 countries and sells its products in over 150 countries and territories around the world. The company also has production facilities in China, Thailand, Mexico, Indonesia, and Malaysia. This leaves the company vulnerable to trade and tariff agreements between the USA and other jurisdictions. Unstable relationships can severely impact Mattel’s bottom line.
Mattel relies on diverse types of partnerships to guarantee its success. Licensing deals with major production companies help the company maintain an attractive pipeline of lucrative brands that can appeal to its customers. As well, the company also requires partnerships with major retailers to sustain the demand and sales of their products. The loss of any major partner (such as Walt Disney in 2014) can lead to massive losses for the company.
- Changing Consumer Preferences
Mattel has been laying out strategies to satisfy the demands of children in the modern digital era, but the company still relies on traditional toys for the bulk of its revenues. Free-to-play gaming is now the staple for many children, with technological advancements allowing them to access a variety of games on mobile and desktop devices. Mattel has been slow to capitalize on this massive demand shift, and they have paid a huge price for it.
- Periodic Earnings Reports
Mattel’s fiscal year runs from January to December. Investors typically watch out for quarterly, semi-annual, and annual earnings releases report to establish the health and future outlook of the business. Some of the metrics to assess include revenues of different segments, short-term debt level, overall profits, new products, and expected earnings in the future. Strong numbers and prospects can inspire higher MAT prices, whereas weak figures and outlook can trigger lower stock prices.
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