Hasbro Inc (HAS) is down sharply today (Oct. 15, 2012), allegedly due to a downgrade to sell by Goldman Sachs. We believe Goldman Sachs is wrong, and today's drop has created a great buying opportunity for this blue-chip dividend growth stock which is designated a Dividend Challenger by David Fish, which indicates a company that has raised its dividend for five to nine straight years. Not only do we believe that today's drop has created an excellent entry point, it also provides the additional benefit of a higher yield. This is a long-term call for reasons that will be specified later.
This article is intended to look at Hasbro's "essential fundamentals at a glance" through the lens of the F.A.S.T. Graphs research tool. Therefore, rather than reinvent the wheel, we direct the readers to two recent articles written by fellow Seeking Alpha Contributors: Hasbro's New 'Board Game' Is A Winner For Shareholders by Alan Brochstein and 8 Reasons To Add Hasbro To Your Portfolio Before Christmas by Chris Katje.
A Live F.A.S.T. Graphs on Hasbro
The F.A.S.T. Graphs on Hasbro illustrates this blue-chip company can be purchased at a sound valuation. Therefore, we rate Hasbro a buy based on the following fundamental metrics:
· a PE ratio of 13.9, which is low, relative to its historical normal PE ratio of 15.8
· a price to sales ratio of 1.23, which is on the lower end of its normal range
· a current dividend yield of 3.7%, which is almost 4 times its yield at the beginning of 2003
· a current payout ratio of approx. 40%, which is almost 4 times greater than it was in 2003
Moreover, in order to conduct your own research and get a clearer perspective on Hasbro's valuation, click on the picture above that links you to a fully functioning sample F.A.S.T. Graphs on Hasbro and research this high-quality dividend growth stock deeper and faster.
(Click on this link or the picture above that will take you to a free, live, and fully functioning FAST Graphs™ on Hasbro. Run this "tool to think with" through its paces. Use the tan navigation bar to the left of the graphs and draw multiple graphs ranging from 2 to 20 years of history. Discover how this tool instantly provides a clear picture of the business behind the stock and dynamically re-evaluates valuation and reveals the clear correlation between the company's earnings and price.)
Note: This link will be live for 90 days beginning October 15, 2012. For more advanced instructions on how to utilize the live graph follow this link.
Summary And Conclusions
Hasbro is our dividend growth stock value idea of the week. At its current quotation, Hasbro is trading at what appears to be a sound valuation. Additionally, the opportunity for long-term dividend growth appears well-defined. Consequently, we believe this is an attractive candidate worthy of further due diligence.
Disclosure: No position at the time of writing.
Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.