Hasbro Dividend Policy Essay

The company I have chosen for this discussion is Hasbro. Hasbro manufactures toys and board games. Since beginning in the 1940s they have become the second largest company in their industry. Their dividend policy is “Declaration of dividends is at the discretion of the Company’s Board of Directors and will depend upon the earnings and financial condition of the Company and such other factors as the Board of Directors deems appropriate” (Goldner, 2016). Dividends paid over the past three years are as follows: $225.8 million in 2015, $216.9 million in 2014 and $156.1 million in 2013. Hasbro also increased its quarterly dividend rate from $0.40 in 2013 to $0.43 in 2014 and $0.46 in 2015. I think Hasbro had a high dividend payout to show how well they are doing. “A high dividend payout is important for …show more content…
Since Hasbro has increased its dividend payout each year there doesn’t seem to be anything on the annual report to suggest that they might stop these payments. Since Hasbro is a mature company and has stable earnings, I think they wouldn’t need to reinvest this money back into the company unless they were planning to start a new project or buy out another company. One benefit of paying dividends instead of reinvesting them is that it looks good to investors who would be more likely to buy stock. “Investors also see a dividend payment as a sign of a company's strength and a sign that management has positive expectations for future earnings, which again makes the stock more attractive” (Fontinelle, 2016). Hasbro has 1559.9 million in long-term debt. It would make sense to pay down some of this debt as debt look bad to investors. Hasbro has plans to pay its long-term debt. “Including the notes described above, the Company has principal amounts of long-term debt at December 27, 2015 of approximately $1,559.9 million due at varying times from 2017 through 2044” (Goldner,