- MAT: 165 shares @ $30.45 --- Yield 4.99% (Initial position, somewhat speculative)
Total capital invested is $5024.25 and this will add $250.80 to my yearly dividends.
$100/week Challenge --- Week 23 S&P 500 1971
I will add some capital tomorrow to my Sharebuilder account, but it will be much lower than usual as this purchase will be the bulk of my investments for this week.
Well, no need to worry about getting the $100 mark this week. Just crushed it with that purchase.
ReplyDeleteI've been averaging down on MAT in my Loyal3 account, but the latest drop in price really provides some opportunity.
W2R,
DeleteI have been watching MAT for several months and decided to pull the trigger today. It may drift down into the 20's but it looks like a pretty decent value at these levels.
MDP
With such high yield, this buy should be pretty solid. I don't see MAT cutting the dividend so if the stock price continues to drop you can just average down, collect the dividends, and wait for the stock price to bounce back.
ReplyDeleteTawcan,
DeleteDefinitely. A 5% yield is a great entry point with MAT and in my opinion the price rebounds, maybe not right away, but by early next year. Mattel raised its dividend in February and I fully expect another raise next February.
MDP
Wow. I just commented about your Sharebuilder purchases yesterday. You really are being aggressive with your purchases these days. The yield on MAT looks very compelling but do you know how this current yield stacks up to historical yield? It seems quite high even for MAT. I know that falling share price is contributing to this yield. Just seems a little too high for my taste.
ReplyDeleteDivHut,
DeleteI actually view the high yield as being less risky. At the beginning of the year MAT was trading around $48 and yielding 3%. Now at a 35% discount it is yielding 5% and much of the risk in my opinion has been removed due to the price drop.
You asked a question earlier on your site about selling a stock when the dividend is cut. If the dividend is cut in half, the yield is still 2.5% and the stock has already been revalued from the recent pullback. I don't think the dividend will be cut and view MAT as a temporary high-yielder.
MDP
MDP,
ReplyDeleteI've also been averaging down my MAT position. I started buying at $40 down to $34 just a week or two ago. Now I'm considering buying another 100 shares and selling my first $100 a month later to avoid the wash and take the tax loss. The brands alone I believe hold a lot of value. That Frozen deal loss is two years out. This xmas comps should be very easy because last year sales were considered bad, and this year the economy is better. After a bad xmas season, they still raised the dividend. This could be an excellent time to buy going into the holidays. Nice entry here on your part.
-RBD
RBD,
DeleteThanks for the comment. I like your strategy of buying more shares and then selling your underwater shares for a tax loss. I am doing that as well to offset my Intel capital gain from earlier this year. Hopefully MAT gives a dividend raise next February. I expect they will. In the meantime I am content to collect 5% from this purchase.
MDP
Good stuff. I really like MAT. Their returns on equity have been stellar for the past 10-15 years. Sure, the recent loss of the "Frozen" toy rights hurts...and there are concerns about declines in sales for historical categories, but companies with ROEs at MAT's levels don't go away easily.
ReplyDeleteWiderhaken,
DeleteNo doubt about it. The market in general looks like it is looking for companies to punish and MAT has taken a beaten this year. I look forward to the holiday season as I think they will regroup and get their act together.
Thanks for the comment.
MDP