Mattel's Stock Rallies As High Dividend Yield Prompts Analyst Upgrade
Mattel Inc.'s stock ran up 6.4% in morning trade Monday, after B. Riley & Co. upgraded the toymaker, citing an attractive risk-versus-reward scenario given the high dividend yield. Analyst Linda Bolton Weiser raised her rating to buy from neutral and her stock price target to $27.25, which is 18% above current levels, from $26. At Thursday's closing price of $22.65, which was just 0.2% above the 4 1/2-year low hit on March 27, the $1.52 annual dividend represented a 6.7% dividend yield, which was just below the 6.9% peak reached at the depth of the recession in March 2009. And Weiser said in a note to clients that even at the worst case scenario for 2015, she believes the dividend will be safe, since 2014 free cash flow exceeded the dividend by $106 million. Despite Monday's rally, the stock was still down 22% year to date, while the S&P 500 has gained 0.4%.
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