With the Consumer Product Safety Commission recalling about 700,000 toys for having excessive lead paint, investors are looking more closely at the toy industry, and trying to determine who is affected the most by the recalls. At the same time, they are also looking for bargains from over-reaction. Most of the lead paint toys came from factories in China.
Here are a few toy companies that you may want to play with, as all of these have market caps over $300 million.
Mattel (MAT) is the El Segundo, California-based company that is considered to be the largest toy company in the world. It is best known for its Barbie dolls. It had 675,000 Barbie accessories recalled, along with 90,000 locomotive toys. Previously, Mattel recalled 967,000 Elmo, Big Bird and other character toys. The stock has a P/E of 15.34, a PEG of 1.44, and a yield of 3%. Hasbro Inc. (HAS) is the second largest toy company in the world, and is best known for its Monopoly board game. It recalled Easy Bake ovens a couple months ago. The stock has a P/E of 18.94, a PEG of 1.43, and a yield of 2.3%. RC2 Corp. (RCRC) manufactures and sells toys, collectibles, and products for infants. Its brands include Winnie the Pooh, John Deere, Nickelodeon, and Sesame Street. It recalled 1.5 million painted wood railroad toys in June. The stock has a P/E of 23.48, and a yield of 1.05%. JAKKS Pacific Inc. (JAKK) is a Malibu, California-based company which makes a wide range of toys, but specializes in action figures. Its licensed brands include World Wrestling, Rocky, Pokemon, and SpongeBob. The stock has a P/E of 9.93, and a PEG of 0.91. Russ Berrie & Co., Inc. (RUS) is a New Jersey company that manufactures, and distributes infant and juvenile consumer products, as well as with including bears, stuffed animals, and soft toys. Its P/E ratio is a high 71.66. Build-A-Bear Workshop Inc. (BBW) is a St. Louis, Missouri company that is a retailer of stuffed bears and animals, along with clothing for the animals. The stock has a P/E of 12.58, and a PEG of 2.44. Marvel Entertainment, Inc. (MVL) has a huge library of about 5,000 characters, including Spider-Man, Iron Man, The Incredible Hulk, Captain America, The Fantastic Four, and X-Men, which it licenses out. It also has a toy division which makes character toys such as Spider-Man, and Curious George. Its P/E is 19.48, and the PEG is 0.85.
Disclosure: The author owns MAT.