Mattel (MAT) could have been thought of as a lock to win a new merchandising agreement with Disney (DIS) to sell the princess dolls of Elsa and Anna from the blockbuster animated movie Frozen. After all, Mattel is widely-known for its dominance in the doll category thanks to its Barbie line-up. If not Mattel, surely it would be Jakks Pacific (JAKK), who currently sells a variety of Disney fairies dolls, playsets, dress-up and accessories.
But both of these companies lost out to Habro (HAS), which today landed a new strategic merchandising relationship with Disney Consumer Products and Frozen Properties beginning in 2016. We think this news is huge and further supports our valuation and dividend thesis on the Dividend Growth portfolio holding. Hasbro has been one of the top performers in the Dividend Growth portfolio since inception, and we continue to expect upside. We think shares are worth more than $62 each; they closed just under $55 today. The company is also yielding 3.5% and has an enviable Dividend Cushion ratio of 1.9.
For those that may not be familiar with the movie Frozen, a look at the box office numbers tells the story. Frozen became the highest grossing animated film of all time in March of this year, passing Toy Story 3, which was released in 2010. In May, it made it to number 5 all-time at the global box office with worldwide gross receipts jumping to $1.219 billion at the time. To put this in perspective, the number 4 spot belongs to Harry Potter and the Deathly Hallows, Part 2, which racked up $1.342 billion worldwide. Avatar ($2.788 billion), Titanic ($2.187 billion), and The Avengers ($1.519 billion) round out the top 3, respectively. This is some great company. According to Box Office Mojo, Frozen has reeled in $1.274 billion at the time of this writing.
But that’s not all. According to the Wrap:
Released on digital Feb. 25 and on disc March 18, “Frozen” is the fastest-selling digital release ever and sold over 3.2 million Blu-ray and DVD units in its first day, putting it on track to be one of the biggest home entertainment sellers in a decade.
The “Frozen” soundtrack returned to the top spot on the Billboard 200 album chart last week for a seventh time with more than 1.6 million copies and more than 5 million individual tracks sold. The album has also held the No. 1 position for five nonconsecutive weeks at Spotify and is approaching 110 million streams worldwide.
The Oscar-winning song “Let It Go” has sold over 2.6 million copies, and the film clip of the song has been viewed over 160 million times on YouTube.
Hasbro continues to execute nicely, and we point investors here for more of our take on the firm. As many know, we can’t possibly repeat everything about every company in each article we write about it. We subdivide our valuation and dividend analysis in the pdf reports, and recent commentary can be accessed underneath the chart on each firms’ landing page. Hasbro’s landing page can be accessed here >>
Appendix A: Worldwide Grosses
Source: Box Office Mojo
Appendix B: Disney’s Frozen “Let It Go” Sequence Performed by Idina Menzel
Source: Walt Disney Animation Studios, YouTube