High-Yield Stocks That Could Wreck Your Retirement: Mattel (MAT)
Dividend Yield: 6%
Iconic toymaker Mattel, Inc. (NASDAQ:MAT) is getting its butt kicked. I’d love to be more tactful here, but there’s really not much else to say. Its historic brands like Barbie aren’t growing like they used to, and rival Hasbro, Inc. (NASDAQ:HAS) is taking all the shelf space with its Disney, Star Wars and Marvel superhero toys and accessories.
Kids are fickle. I get that. My son changes favorite soccer teams more regularly than I change my socks. But Hasbro has had a long string of wins, and Mattel just hasn’t been able to keep up.
Could Mattel’s brands make a comeback? Sure. All it would take would be a successful cartoon or movie. And it’s entirely possible that Mattel will come out with the new “it” toy tomorrow. But we haven’t seen any indication of it yet, and now Hasbro has Disney’s marketing juggernaut behind it via the Disney and Star Wars movies and assorted spinoffs.
Mattel is a high-yield stock for now, but unless earnings pick up in a hurry, that dividend is unsustainable. It’s currently sitting at a payout ratio of 165% of profits.
Stay away from Mattel. It’s a stock with the potential to absolutely wreck your retirement.
Charles Sizemore is the principal of Sizemore Capital, a wealth management firm in Dallas, Texas. As of this writing, he was long KMI.