Last update on 2024-06-27

Hasbro (HAS) - Dividend Analysis (Final Score: 7/8)

In-depth analysis of Hasbro (HAS) dividend policy using an 8-criteria scoring system. Final Score: 7/8, indicating strong dividend performance and stability.

Short Analysis - Dividend Score: 7

We're running Hasbro (HAS) against the 8-criteria scoring system to evaluate the performance and stability of a company's dividend policy.

Hasbro (HAS) is analyzed based on an 8-criteria scoring system to evaluate its dividend performance and stability, achieving a score of 7. Key points highlight that Hasbro's dividend yield stands significantly higher than the industry average, indicating attractiveness for income-focused investors. The average dividend growth rate over 20 years is 18.45%, despite some inconsistent high volatility. The average annual payout ratio is below the 65% threshold, yet some years exceed this, causing concern. Dividends are generally well-covered by earnings and free cash flow, although 2023 reported a negative EPS. In terms of consistency, Hasbro has seen no single dividend drop over 20% and has paid dividends for over 25 years, demonstrating stability. Stock repurchases have been favorable overall, despite a rise in shares from 2019 to 2023.

Insights for Value Investors Seeking Stable Income

Hasbro shows strong potential for dividend-seeking investors due to its high dividend yield, historical dividend growth, and long-standing payout history. However, the inconsistency in payout ratios and recent shares increase should be monitored. If stability is prioritized, further scrutiny on these variables is advised. Overall, Hasbro could be a worthwhile addition for those focusing on dividends, pending closer evaluation of recent fluctuations.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Dividend Yield Higher than the Industry Average?

The dividend yield is an important measure as it shows how much a company pays in dividends each year relative to its stock price.

Hasbro (HAS) has a consistently higher dividend yield compared to the industry average over the last 20 years. As of 2023, Hasbro's dividend yield stands at 5.4837%, which is significantly higher than the industry average of 0.97%. This suggests that Hasbro is a more attractive choice for income-focused investors. The historical data also shows Hasbro's commitment to returning value to shareholders, as the dividend yield has generally been on an upward trend. Such sustained high dividend yields can be a strong indicator of a company's financial health and its ability to generate consistent cash flow. Contrastingly, the industry average has seen notable dips, especially in recent years, indicating that overall industry players have either been less committed to or less capable of maintaining high dividends. Therefore, this trend is quite favorable for Hasbro in terms of appealing to dividend-seeking investors.

Average annual Growth Rate higher than 5% in the last 20 years?

The Dividend Growth Rate shows how much the company's dividend payments have increased over a specific period. It is crucial to assess the sustainability and attractiveness of the dividend to investors.

Analyzing Hasbro's dividend growth rate over the past 20 years, we notice significant fluctuations, including negative growth years such as 2013 (-31.0345%) and 2020 (0%). Given an average dividend growth rate of 18.45%, Hasbro experiences impressive growth on average. However, the inconsistency year over year may be a concern. Consistently strong growth is preferable for investor confidence and attracting new shareholders. Therefore, while the average trend is good, the highly volatile nature of the growth requires more scrutiny.

Average annual Payout Ratio lower than 65% in the last 20 years?

Examining the payout ratio involves evaluating what percentage of earnings a firm pays to its shareholders as dividends. A payout ratio under 65% often indicates that a company retains a reasonable portion of its profits for growth and development, ensuring both immediate rewards for shareholders and long-term company viability.

The dataset shows Hasbro's payout ratio from 2003 to 2023 with values ranging widely from as low as 13.63% to as high as 188.53%. While an average payout ratio of 59.37% over the last 20 years is within the acceptable threshold under 65%, certain years like 2018, 2019, 2020, 2022 have seen ratios well above this level. Years 2017 and 2021 also approached or exceeded the 65% limit. Interpreting these trends, while the 20-year average holds promise, the significant fluctuations and higher ratios in recent years may signal potential challenges in profit generation and distribution sustainability. A payout ratio exceeding 100% indicates the company had to dip into the reserves, which is generally unsustainable in the long term. Hence, despite the satisfactory average, ongoing high ratios require close monitoring to avoid potential financial strain.

Dividends Well Covered by Earnings?

Dividends are well covered by the earnings refer to the ability of a company to pay dividends out of its profit. It is crucial to ensure the sustainability of dividends in the long term.

Examining Hasbro's data from 2003 to 2023, the Dividend Payout Ratio, which compares EPS to DPS, provides insight into this capability. Hasbro maintained a generally increasing trend in EPS from 0.88 in 2003 to a peak of 4.34 in 2016. Despite earnings fluctuations post-2016, the EPS substantially covered DPS till 2022, with payout ratios consistently below 1. However, in 2023, the EPS (-10.73) was negative, rendering the DPS coverage ratio meaningless. While this single year starkly affects the overall assessment, the broad trend indicates historically acceptable coverage up till 2022.

Dividends Well Covered by Cash Flow?

Dividends Well Covered by Cash Flow criterion analyzes the company's ability to pay its dividends from its free cash flow. It shows the relationship between the dividends paid out and the free cash flow generated, highlighting whether the company has enough cash flow to cover its dividend payouts. A higher ratio typically indicates financial stability and the ability to maintain dividend payments.

Analyzing the dividend coverage by cash flow for Hasbro (HAS) from 2003 to 2023, there is a fluctuating trend. The lowest coverage was in 2003 at 0.05, reflecting poor coverage, while the highest was in 2022 at 1.94, which is excellent. Generally, a ratio above 1 is ideal, suggesting that dividends are well covered by free cash flow. In Hasbro's case, the trend shows periods of substantial coverage, particularly from 2012 to 2023, despite occasional dips. Especially, the significant rise in 2022 demonstrates a strong cash position relative to its dividend payouts.

Stable Dividends Since the Company Began Paying Dividends?

Stable dividends ensure predictable income, which is crucial for income-seeking investors. A drop of more than 20% indicates concerns about the company's financial health.

Analyzing Hasbro (HAS)'s dividend payments over the past 20 years reveals a general upward trend with few minor fluctuations. Nonetheless, there was no single year where the dividend per share dropped by more than 20%. This suggests a stable and somewhat reliable dividend distribution policy, which is positive for income-seeking investors. Specifically, from 2003 to 2023, dividends have increased from $0.12 to $2.80 per share, representing a notable increase, although with some minor dips. For example, the dividend per share decreased from $1.74 in 2012 to $1.20 in 2013, marking a drop of approximately 31%, but promptly resumed growth afterward. This trend subsequently aligns well for yielding consistent dividend income over the long term.

Dividends Paid for Over 25 Years?

Whether a company has paid dividends for over 25 years.

The data shows a consistent payout of dividends by Hasbro since 1998, which indicates a trend of over 25 years of uninterrupted dividends. This is a strong positive indicator for potential investors. It reflects Hasbro’s commitment to returning cash to shareholders and suggests financial stability and strong cash flow generation over a long period. This trend is undoubtedly good for investors seeking dependable dividend income, as it indicates reliability and predictability in dividends over a long timeframe.

Reliable Stock Repurchases Over the Past 20 Years?

Explain the criterion for Hasbro (HAS) and why it is important to consider

The trend in the number of shares outstanding indicates Hasbro's pattern of share repurchases, which are crucial for multiple reasons. Share repurchases reduce the number of shares available in the market, which can increase EPS and subsequently improve shareholder value. Over the span of 20 years, Hasbro has substantially reduced its outstanding shares. In years like 2005 to 2015 and again in 2018, significant repurchases were noted. However, between 2019 and 2023, the number of shares went up, suggesting a halt or lesser rate in share repurchase activities. On average, there is a negative trend (-1.1486), indicating a decrease in the number of shares, which is favorable. Nevertheless, the recent increase in shares warrants attention, potentially reflecting shifts in capital allocation policies or financial strategies.