Mattel (MAT) Upgraded, Why Not Hasbro (HAS)?

Shares of Hasbro (NYSE: HAS) are rising today on the back of a Mattel (NYSE: MAT) upgrade at Needham & Co. The firm raised its investment rating on Mattel from Hold to Strong Buy and set a $26 price target, which represents a 56% premium from yesterday's closing price of $16.65.

Mattel stock is up $1.61, or more than 9%, to $18.26, as a result of the upgrade, and is boosting the entire toy industry, interestingly, as Mattel is the largest pure-play toy maker. The second largest toy maker, Hasbro, is not having quite as good a day, but is still up 7% and is seeing usually heavy volume in today's afternoon trading session.

Lets take a look at a few of Mattel and Hasbro's fundamentals in an attempt to gain some insight on the analyst upgrade of Mattel, rather than Hasbro, despite the two companies being fundamentally similar:

	Mattel	Hasbro
Price	$18.26	$23.21
Mkt. Cap	$6.69B	$3.42B
P/E	12.67	12.92
EPS	$1.44	$1.80
Dividend Yield	4.26%	2.84%
F P/E	16.39	17.45
Current Ratio	1.80	1.89
EPS Growth (MRQ)	(3%)	65%
EPS Growth (5 yr.)	16.5%	30%
Exp. EPS Growth in '08	15%	(5%)
PEG	1.23	1.22
Profit Margin	9.47%	8.41%
6 mo. Price Performance	down 35%	down 30%

Right away, one can notice several measures that make Mattel more attractive than Hasbro (from a fundamental perspective): Mattel is trading at a lower multiple than Hasbro, has a higher dividend yield, is expected to grow faster than Hasbro in '08, has wider margins, and is down more in the last 6 months than Hasbro.

Needham's analyst obviously used many more factors to form an opinion about Mattel, however, fundamental analysis, such as the comparisons made above, is an easy and quick way to decide if a stock is for you.

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