Critical Survey: Hasbro (NASDAQ:HAS) versus Shimano (OTCMKTS:SMNNY)

Hasbro (NASDAQ:HAS) and Shimano (OTCMKTS:SMNNY) are both large-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Insider and Institutional Ownership

91.8% of Hasbro shares are held by institutional investors. Comparatively, 0.0% of Shimano shares are held by institutional investors. 0.7% of Hasbro shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Hasbro and Shimano, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hasbro	0	4	12	0	2.75
Shimano	0	0	0	0	0.00

Hasbro currently has a consensus target price of $109.07, suggesting a potential upside of 16.05%. Given Hasbro’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Hasbro is more favorable than Shimano.

Dividends

Hasbro pays an annual dividend of $2.80 per share and has a dividend yield of 3.0%. Shimano pays an annual dividend of $0.13 per share and has a dividend yield of 1.1%. Hasbro pays out 50.4% of its earnings in the form of a dividend. Shimano pays out 31.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Earnings and Valuation

This table compares Hasbro and Shimano”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hasbro	$4.70 billion	2.82	-$322.40 million	$5.56	16.90
Shimano	$3.12 billion	3.35	$227.74 million	$0.42	28.79

Shimano has lower revenue, but higher earnings than Hasbro. Hasbro is trading at a lower price-to-earnings ratio than Shimano, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Hasbro and Shimano’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hasbro	15.97%	141.11%	14.72%
Shimano	12.18%	5.24%	4.85%

Risk and Volatility

Hasbro has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500. Comparatively, Shimano has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500.

Summary

Hasbro beats Shimano on 11 of the 16 factors compared between the two stocks.

About Hasbro

Hasbro, Inc., together with its subsidiaries, operates as a toy and game company in the United States, Europe, Canada, Mexico, Latin America, Australia, China, and Hong Kong. The company operates through Consumer Products; Wizards of the Coast and Digital Gaming; Entertainment; and Corporate and Other segments. The Consumer Products segment engages in the sourcing, marketing, and sale of toy and game products. This segment also promotes its brands through the out-licensing of trademarks, characters, and other brand and intellectual property rights to third parties through the sale of branded consumer products, such as toys and apparel. Its toys and games include action figures, arts and crafts and creative play products, dolls, play sets, preschool toys, plush products, sports action blasters and accessories, vehicles and toy-related specialty products, games, and other consumer products; and licensed products, such as apparel, publishing products, home goods and electronics, and toy products. The Wizards of the Coast and Digital Gaming segment engages in the promotion of its brands through the development of trading cards, role-playing, and digital game experiences based on Hasbro and Wizards of the Coast games. The Entertainment segment engages in the development, production, and sale of entertainment content, including film, television, children's programming, digital content, and live entertainment. The company sells its products to retailers, distributors, wholesalers, discount stores, specialty hobby stores, drug stores, mail order houses, catalog stores, department stores, and other traditional retailers, as well as e-commerce retailers; and directly to customers through its e-commerce websites under the MAGIC: THE GATHERING, Hasbro Gaming, PLAY-DOH, NERF, TRANSFORMERS, DUNGEONS & DRAGONS, PEPPA PIG, and other brand names. Hasbro, Inc. was founded in 1923 and is headquartered in Pawtucket, Rhode Island.

About Shimano

Shimano Inc. develops, produces, and distributes bicycle components, fishing tackles, and rowing equipment. It has operations in Japan, Asia, Europe, North America, Latin America, and Oceania. Shimano Inc. was founded in 1921 and is headquartered in Sakai, Japan.