Analyzing JAKKS Pacific (JAKK) and Mattel (MAT)

Mattel (NASDAQ: MAT) and JAKKS Pacific (NASDAQ:JAKK) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitabiliy, risk, earnings, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Mattel and JAKKS Pacific, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mattel 0 8 5 0 2.38
JAKKS Pacific 0 7 0 0 2.00

Mattel presently has a consensus price target of $27.79, indicating a potential upside of 36.03%. JAKKS Pacific has a consensus price target of $5.42, indicating a potential upside of 38.89%. Given JAKKS Pacific’s higher probable upside, analysts clearly believe JAKKS Pacific is more favorable than Mattel.

Risk and Volatility

Mattel has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, JAKKS Pacific has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Dividends

Mattel pays an annual dividend of $1.52 per share and has a dividend yield of 7.4%. JAKKS Pacific does not pay a dividend. Mattel pays out 192.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Mattel and JAKKS Pacific’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mattel 5.22% 13.19% 4.94%
JAKKS Pacific 0.05% 0.26% 0.07%

Insider and Institutional Ownership

95.2% of Mattel shares are held by institutional investors. Comparatively, 67.0% of JAKKS Pacific shares are held by institutional investors. 0.9% of Mattel shares are held by insiders. Comparatively, 5.2% of JAKKS Pacific shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Mattel and JAKKS Pacific’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Mattel $5.32 billion 1.32 $735.00 million $0.79 25.86
JAKKS Pacific $705.30 million 0.11 $38.55 million ($0.93) -4.19

Mattel has higher revenue and earnings than JAKKS Pacific. JAKKS Pacific is trading at a lower price-to-earnings ratio than Mattel, indicating that it is currently the more affordable of the two stocks.

Summary

Mattel beats JAKKS Pacific on 12 of the 15 factors compared between the two stocks.

Mattel Company Profile

Mattel, Inc. manufactures and markets a range of toy products around the world. The Company’s segments are North America; International, and American Girl. Its portfolio of brands and products are grouped into approximately four major brand categories, including Mattel Girls & Boys Brands, Fisher-Price Brands, American Girl Brands and Construction and Arts & Crafts Brands. The Mattel Girls & Boys Brands category includes Barbie fashion dolls, Monster High, Disney Classics, Ever After High, Little Mommy, and Polly Pocket, Hot Wheels and Matchbox vehicles and play sets, and CARS, Disney Planes, BOOMco, Toy Story, Max Steel, WWE Wrestling and DC Comics. The Fisher-Price Brands category includes Fisher-Price, Little People, BabyGear, Laugh & Learn, Imaginext, Thomas & Friends, Blaze and The Monster Machines, Shimmer and Shine, Mickey Mouse Clubhouse, Minnie Mouse, Octonauts, and Power Wheels. The Construction and Arts & Crafts Brands category includes MEGA BLOKS, RoseArt and Board Dudes.

JAKKS Pacific Company Profile

JAKKS Pacific, Inc. is a multi-line, multi-brand toy company. The Company designs, produces, markets and distributes toys and related products, pet toys, consumables and related products, electronics and related products, kids indoor and outdoor furniture, and other consumer products. The Company operates through two business segments: traditional toys and electronics, and role play, novelty and seasonal toys. The traditional toys and electronics segment includes action figures, vehicles, playsets, plush products, dolls, accessories, electronic products, construction toys, infant and pre-school toys, foot to floor ride-on vehicles, wagons and pet products and related products. The role play, novelty and seasonal segment includes role play and dress-up products, novelty toys, seasonal and outdoor products, indoor and outdoor kids’ furniture and Halloween and everyday costume play.

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