Mattel's Dividends May Not Last Forever
Whether you're a beginning investor or a near-retiree, the importance of purchasing stocks that pay dividends cannot be overstated.
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#1 Aug 27, 2010
Dividends are safe so long as a company is consistent with enough cash flow to support the declared dividend. No company can guaranty that it will always raise dividends or that they that the dividend will not be reduced or eliminated. Mattel has made rewarding the stock investor a high priority so it will pay a healthy dividend for as long as it can. That structure is intended to grow the dividend over time. So far there seems to be enough free cash flow to support the current dividend.
Mattel's toy line up for 2010 looks great. The price of doing business overseas is costing more with oil being so high and China setting a standardized minimum wage which would mean an increase in pay for toy factory workers.
Mattel in the past has balanced some of that extra cost cost cutting measures and buy passing on some of the expense to the retailers and ultimately to the consumer. Oh Well, such is life, but the dividend has a better chance of surviving that way. There is a lot of value in a company that proves that its dividend is safe year over year.
Just my point of view.
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