Hasbro’s Excessive Debt Makes Shares Unappealing

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Shares of Hasbro ($NASDAQ:HAS) have recently become unappealing to potential investors due to the company’s excessive debt. Despite its impressive history, Hasbro’s high debt levels have made its shares unattractive to many investors. Hasbro’s debt has grown rapidly over the last several years. This level of debt makes it difficult for Hasbro to invest in its operations and activities, as much of the company’s profits are used to pay off the debt. As a result, shareholders are not likely to see any meaningful returns from their investments in Hasbro. Furthermore, Hasbro’s stock price has been heavily affected by its high debt levels.

Additionally, the company’s debt-to-equity ratio stands at over 2, which is higher than many other companies in the industry. Overall, Hasbro’s excessive debt levels make shares of the company unappealing to potential investors. The company’s inability to invest in its operations due to its large debt load makes it difficult for shareholders to see any returns from their investments in Hasbro. Additionally, the company’s high debt-to-equity ratio and lower stock price make it much less desirable than other similar companies in the industry.

Price History

On Wednesday, Hasbro stock opened at $51.3 and closed at $50.0, down by 2.7% from its prior closing price of $51.4. This decline in share price is largely attributed to the company’s excessive debt, which has made shares of the toy maker unappealing to investors. Hasbro has been dealing with a significant amount of debt for many years, leading to an increase in their financial leverage, and a decrease in their overall profitability. As a result, investors are becoming increasingly wary of investing in Hasbro.

Additionally, the company’s debt burden has caused its credit rating to be lowered, making it more difficult for the company to obtain financing for future growth initiatives. As a result of these factors, Hasbro’s stock is becoming less attractive and investors are seeking out safer investments with lower risk. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Hasbro. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Hasbro. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Hasbro. More…

Key Ratios Snapshot

Some of the financial key ratios for Hasbro are shown below. More…

Analysis

GoodWhale has examined the financials of HASBRO and found it to be a strong company. Our analysis using the Star Chart gives HASBRO a health score of 7/10 with regard to its cash flows and debt. This means that the company is capable of sustaining future operations even in times of crisis. By classifying HASBRO as a ‘cow’ type of company, we conclude that it has the track record of paying out consistent and sustainable dividends. This makes it an attractive investment option for income-seeking investors. Furthermore, HASBRO is strong in terms of dividend, profitability, and weak in terms of asset, growth. This could suit investors looking for value investments. It is important to note that while HASBRO may be a suitable investment for some investors, it may not necessarily be the best choice for others. Therefore, investors should carefully weigh their options before making an investment decision. More…

Peers

Hasbro Inc is a publicly traded company that designs, manufactures, and markets games and toys. The company operates in three segments: US and Canada, International, and Entertainment and Licensing. Hasbro has a portfolio of brands that includes NERF, MONOPOLY, MAGIC: THE GATHERING, MY LITTLE PONY, TRANSFORMERS, PLAY-DOH, and SESAME STREET. The company’s competitors include Spin Master Corp, Huayi Tencent Entertainment Co Ltd, and BANDAI NAMCO Holdings Inc.

– Spin Master Corp ($TSX:TOY)

Spin Master Corp is a global leader in children’s toys, entertainment and lifestyle products. The company has a market cap of 4.57B as of 2022 and a Return on Equity of 21.64%. Spin Master Corp’s products include some of the world’s most popular toy brands, such as Paw Patrol, Hatchimals and Zoomer. The company’s products are available in over 100 countries and its mission is to inspire the next generation of play.

– Huayi Tencent Entertainment Co Ltd ($SEHK:00419)

Huayi Tencent Entertainment Co Ltd is a Chinese entertainment company with a market cap of 2.05 billion as of 2022. The company has a return on equity of -28.77%. The company is involved in the production, distribution, and exhibition of films and television programs in China. The company also operates an online game platform and a social networking website.

– BANDAI NAMCO Holdings Inc ($TSE:7832)

BANDAI NAMCO Holdings Inc is a Japanese holding company that operates in the entertainment industry. It has a market cap of 2.16T as of 2022 and a return on equity of 16.4%. The company was founded in 1955 and is headquartered in Tokyo, Japan. BANDAI NAMCO Holdings is engaged in the development, production, and marketing of toys, games, and other entertainment products. The company’s products are sold in over 40 countries worldwide.

Summary

Hasbro, Inc. is currently facing excess debt, making the company’s shares unattractive to investors. The amount of debt is staggering compared to the low cash reserves, creating a high debt-to-equity ratio that hinders potential investors. The company’s high debt levels also affect its financial liquidity as well as operating margins, leading to increased risk. Furthermore, its high leverage makes it difficult to obtain additional funds or financing, and limits the company’s ability to pay dividends or make investments. These issues create significant risk in investing in Hasbro equity.

However, given the firm’s strong brand recognition and strong cash flow, investors must weigh the potential upside against the high debt levels when making a decision.