No Playing around on with this Dividend - Mattel (MAT)

Mattel (MAT) owns some of the most iconic brands in the world, including Hot Wheels and Barbie. The company is historically a stable dividend payer and currently yields 3.36%.

A recent sell-off in toy manufacturer Mattel Inc. (MAT) might be an opportunity for alert dividend investors.
 
Following third quarter results, the Mattel (MAT) share price sold off 7% to trade down at $22.45, leaving the counter on a price to earnings multiple of 12.8 times earnings and a dividend yield of around 3.3%.
 
The sell-off was primarily a result of a poor performance from its Fisher-Price pre-school toy range which came in lower than expected. Despite this underperformance, income came in higher than expected at $283.3m, or $0.77 per share, compared to last year's third quarter net income of $229.8m, or $0.63 per share.
 
For the quarter, net sales were $1.83bn, up 2% compared to $1.79bn last year and at the end of the quarter the company was sitting with around $960m in cash or cash equivalents.
 
Mattel (MAT) is confident of being able to generate sufficient cash flows to maintain its solid dividend yield. Options issued to executives in 2009 were priced with an assumed dividend yield of 4.3%, up from the 3.7% the company used for pricing purposes in 2008. The company delivered 4.06% in 2009 and 5% in 2008.
 
Before the most recent sell-off Mattel (MAT) had been a solid performer over the last 12 months. In November 2009, the share was trading at $20 a share and hit a high for the year of $24.44 in October before selling down to $22.50.
 
One of the key strengths for Mattel (MAT) is its highly recognizable toy and entertainment brands. From the classic Barbie and Hot Wheels to the more recent additions such as PollyPocket.com, Mattel (MAT) works hard to evolve and consistently develop its range.
 
Considering that Barbie has been able to produce long-term dividends since first arriving on the scene in 1959, investors who are seeking long-term yield may look to Mattel (MAT) to deliver the same.

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