This is a guest post by Mike, aka The Dividend Guy. He authors The DividendGuy Blog since 2010 and manages portfolios at DividendStocks Rock. He is a passionate investor.
Founded in 1923, Hasbro (HAS) designs, manufactures and markets games and toys for children and families. It owns several toy brands and also excels in producing licensed toys related to movies and TV shows. Their main competitors are Mattel (MAT) for toys and Nickelodeon, Cartoon Network and Disney Channel (DIS) for viewers, advertising revenue and distribution.
Overview
Did you know the company started by selling textile remnants and first manufactured pencil boxes and school supplies? It's almost 20 years after its founding that Hasbro created its first toy in the 1940s. In 1952, Mr. Potato (my 3 years old still play with it!) was created. Today, Hasbro owns several franchise brands such as Transformers, Monopoly, Play-Doh, My little Pony, Magic and NERF.
Business Segments
Since 2001, Hasbro has focused reviving their old existing brands and divided their business into three segments: Canada & USA, International and Entertainment & Licensing. They all work around four axes of development:
#1 Toy & Game Product Innovation
This is where HAS works on re-imaging their existing brand such as Transformers as well as creating new ones. This segment represents about 45% of their total revenue. Hasbro has a talent for creating licensed toys. Among their partners, we count Disney, Marvel, Star Wars and Sesame Street.
#2 Digital Media
Hasbro Studios is responsible for brand-driven storytelling content for television. By producing TV shows and movies related to their toy brands, Hasbro is creating 20min+ long advertising for their toys in stores. It's a great way to add income while boosting sales of their core products.
#3 Immersive Entertainment Experiences
Since technology becomes more important in our children's lives, Hasbro has created an immersive entertainment division. The goal is to use technology (such as 3D) to keep children playing with their toys. It usually builds on their efforts with television and animation movies.
#4 lifestyle Licensing
The lifestyle licensing category operates through the out-licensing of the Company's intellectual properties to third parties for promotional and merchandising uses in businesses which do not compete directly with the Company's own product offerings, such as apparel, publishing, home goods and electronics, or in certain situations, to utilize them for toy products where the Company consider the out-licensing of brands to be more effective. (source: Reuters)
