Hasbro’s (Nasdaq: HAS) portfolio includes classics such as Nerf, Play-Doh and Twister, as well as Parker Brothers games such as Monopoly.
Its dividend recently yielded 4 percent, and the dividend’s five-year average annual dividend hike has been a hefty 16.2 percent. The stock has been a grower, too, averaging 6 percent annual growth over the past 20 years and 15 percent over the past decade.
As with any company, there are risks. Disney recently bought Lucasfilm (the company behind “Star Wars”), Pixar and Marvel, making it a huge partner in Hasbro’s movie tie-in strategy and a possible troublemaker if it starts playing hardball. Meanwhile, Zynga’s Words With Friends is very close in game play to Hasbro’s Scrabble, and Zynga may look to do the same with other Hasbro games.
Hasbro does make the board game version of Words With Friends, so the two are cooperating. Tablets are a new threat to old-fashioned games.
Hasbro keeps innovating, though. For instance, its new Monopoly Zapped brings the game into the digital era by integrating it with an iPad app that acts as banker and brings in mini-games.
Consider adding Hasbro to your portfolio or watch list. You might also look into its bigger rival, Mattel. (The Motley Fool owns shares of Disney and its newsletters have recommended Disney, Hasbro and Mattel.)
Ask the Fool
Q: How should I invest my money? I’m 14. – C.T., Bloomington, Ill.
A: Any money for college shouldn’t be in stocks, as the market could drop in the short term. Long-term investments (those for five or more years) can patiently ride out downturns. Short-term money is best kept in safer places, such as CDs. (Look up good CD rates at www.bankrate.com.)
You’re smart to start young. If you invest $500 in a stock index fund, and it earns the market’s historical average annual return of about 9 or 10 percent, in 30 years, when you’re only 44, it will top $6,500. When you’re 65, it’ll top $40,000. Add to it over the years, and you’re looking at early retirement as a millionaire!
My dumbest investment
In about 1999, my family went through a kick of eating out frequently at Boston Market. I was digging the place – best chicken tortilla soup, great kids meals, etc. It didn’t occur to me that the main reason we liked it was that my wife is an introvert and there were never any other customers for us to worry about. I thought to myself, how could anything ever go wrong with a friendly little restaurant chain that serves good American food?
Wrong! I think I bought 100 shares at about $13 per share as one of my first-ever stock investments. I rode it all the way to absolute zero when McDonald’s finally assumed ownership and former stockholders received zip. The food just doesn’t taste as good there anymore – not to me, anyway. – R.H., Spring Hill, Kan.
The Fool responds: McDonald’s bought the company in 2000 after it had entered bankruptcy protection (which often leaves shareholders with little). In 2007, McDonald’s sold the company to private equity firm Sun Capital Partners. Liking a company is never enough. You need to study its numbers, too.