Is Hasbro's Dividend Helping or Hurting the Company?
Hasbro (NASDAQ: HAS), one of the world's largest toy and game manufacturers, has a long history of returning excess cash to shareholders. Although share repurchases were suspended in the first quarter of 2020 due to the company's $3.8 billion acquisition of Entertainment One (eOne), it remains committed to paying a healthy dividend.
Dividend stocks attract investors who demand a consistent, predictable income stream from their portfolios. While Hasbro has seen its stock fall 33% so far this year compared to the S&P 500's 5% decline, the limitless number of income-focused funds and investors in the market provides a certain level of support for the share price.
Since 2010, Hasbro's annual dividend payments have grown at a compound annual growth rate (CAGR) of almost 12% to reach $337 million in fiscal 2019. The company's net income, on the other hand, has risen just 3% per year over that same time period. This has resulted in a doubling of the dividend payout ratio from 30% in 2010 to 65% in 2019. How should long-term investors interpret this trend?
Source Fool.com
