Mattel (NASDAQ: MAT) and Summer Infant (NASDAQ:SUMR) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitabiliy.

Dividends

Mattel pays an annual dividend of $1.52 per share and has a dividend yield of 8.0%. Summer Infant does not pay a dividend. Mattel pays out 220.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation & Earnings

This table compares Mattel and Summer Infant’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Mattel $5.34 billion 1.22 $690.60 million $0.69 27.54
Summer Infant $194.00 million 0.18 $6.82 million ($0.19) -9.63

Mattel has higher revenue and earnings than Summer Infant. Summer Infant is trading at a lower price-to-earnings ratio than Mattel, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

91.8% of Mattel shares are held by institutional investors. Comparatively, 50.0% of Summer Infant shares are held by institutional investors. 0.9% of Mattel shares are held by insiders. Comparatively, 8.4% of Summer Infant shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Mattel has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500. Comparatively, Summer Infant has a beta of -0.11, indicating that its stock price is 111% less volatile than the S&P 500.

Profitability

This table compares Mattel and Summer Infant’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mattel 4.51% 11.62% 4.20%
Summer Infant -1.82% 0.56% 0.09%

Analyst Ratings

This is a breakdown of recent ratings for Mattel and Summer Infant, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mattel 1 5 6 0 2.42
Summer Infant 0 0 2 0 3.00

Mattel currently has a consensus target price of $25.41, indicating a potential upside of 33.73%. Summer Infant has a consensus target price of $2.75, indicating a potential upside of 50.27%. Given Summer Infant’s stronger consensus rating and higher probable upside, analysts plainly believe Summer Infant is more favorable than Mattel.

Summary

Mattel beats Summer Infant on 11 of the 16 factors compared between the two stocks.

Mattel Company Profile

Mattel, Inc. manufactures and markets a range of toy products around the world. The Company’s segments are North America; International, and American Girl. Its portfolio of brands and products are grouped into approximately four major brand categories, including Mattel Girls & Boys Brands, Fisher-Price Brands, American Girl Brands and Construction and Arts & Crafts Brands. The Mattel Girls & Boys Brands category includes Barbie fashion dolls, Monster High, Disney Classics, Ever After High, Little Mommy, and Polly Pocket, Hot Wheels and Matchbox vehicles and play sets, and CARS, Disney Planes, BOOMco, Toy Story, Max Steel, WWE Wrestling and DC Comics. The Fisher-Price Brands category includes Fisher-Price, Little People, BabyGear, Laugh & Learn, Imaginext, Thomas & Friends, Blaze and The Monster Machines, Shimmer and Shine, Mickey Mouse Clubhouse, Minnie Mouse, Octonauts, and Power Wheels. The Construction and Arts & Crafts Brands category includes MEGA BLOKS, RoseArt and Board Dudes.

Summer Infant Company Profile

Summer Infant, Inc. is an infant and juvenile products company. The Company is engaged in the juvenile industry, providing mothers and caregivers a range of products to care for babies and toddlers. As of December 31, 2016, it marketed over 1,100 products in several product categories, including monitoring, safety, nursery, baby gear and feeding products. It markets its products, under its Summer Infant, SwaddleMe and Born Free brand names. Its anchor products in its product categories include monitoring, such as wireless fidelity (Wi-Fi)/Internet, video, audio and prenatal; safety, including gates, bath, potties, boosters and positioners; nursery, such as swaddle, travel accessories, safe sleep, soothers and sleep aides; baby gear, including strollers, bassinets, high chairs and playards, and feeding products, such as bottles, drinking cups, bibs and placemats, electronics and pacifiers. It sells its products across the globe to national retailers, as well as independent retailers.

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