Critical Survey: Take-Two Interactive Software (TTWO) and Hasbro (HAS)

Take-Two Interactive Software (NASDAQ: TTWO) and Hasbro (NASDAQ:HAS) are both mid-cap consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, institutional ownership and profitabiliy.

Dividends

Hasbro pays an annual dividend of $2.28 per share and has a dividend yield of 2.1%. Take-Two Interactive Software does not pay a dividend. Hasbro pays out 50.7% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings for Take-Two Interactive Software and Hasbro, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Take-Two Interactive Software 1 2 14 0 2.76
Hasbro 0 8 5 0 2.38

Take-Two Interactive Software presently has a consensus target price of $72.00, indicating a potential downside of 2.91%. Hasbro has a consensus target price of $105.98, indicating a potential downside of 3.34%. Given Take-Two Interactive Software’s stronger consensus rating and higher probable upside, analysts clearly believe Take-Two Interactive Software is more favorable than Hasbro.

Risk and Volatility

Take-Two Interactive Software has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, Hasbro has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Institutional & Insider Ownership

79.3% of Hasbro shares are held by institutional investors. 2.5% of Take-Two Interactive Software shares are held by company insiders. Comparatively, 11.0% of Hasbro shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Take-Two Interactive Software and Hasbro’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Take-Two Interactive Software 3.70% 22.89% 5.73%
Hasbro 11.34% 32.36% 12.02%

Earnings and Valuation

This table compares Take-Two Interactive Software and Hasbro’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Take-Two Interactive Software $1.78 billion 4.10 $147.17 million $0.49 151.35
Hasbro $5.04 billion 2.70 $969.57 million $4.50 24.36

Hasbro has higher revenue and earnings than Take-Two Interactive Software. Hasbro is trading at a lower price-to-earnings ratio than Take-Two Interactive Software, indicating that it is currently the more affordable of the two stocks.

Summary

Hasbro beats Take-Two Interactive Software on 10 of the 16 factors compared between the two stocks.

About Take-Two Interactive Software

Take-Two Interactive Software, Inc. is a developer, publisher and marketer of entertainment for consumers around the world. The Company develops and publishes products through its labels, Rockstar Games and 2K. It operates through publishing segment. It has a portfolio of software content for the hardware platforms in a range of genres, including action, adventure, family/casual, racing, role-playing, shooter, sports and strategy, which it distributes across the world. The Company’s products are designed for console gaming systems, such as PlayStation 3 and PlayStation 4; Xbox 360 and Xbox One, and personal computers, including smartphones and tablets. Rockstar Games is the developer and publisher of Grand Theft Auto, as well as other franchises, including L.A. Noire, Max Payne, Midnight Club and Red Dead. 2K publishes owned and licensed titles across a range of genres. It has internal development studios in Canada, China, Czech Republic, the United Kingdom and the United States.

About Hasbro

Hasbro, Inc. (Hasbro) is a play and entertainment company. The Company’s operating segments include the U.S. and Canada, International, and Entertainment and Licensing. From toys and games to content development, including television programming, motion pictures, digital gaming and a consumer products licensing program, Hasbro fulfills the fundamental need for play and connection for children and families around the world. The Company’s U.S. and Canada segment is engaged in the marketing and sale of its products in the United States and Canada. The International segment is engaged in the marketing and sale of the Company’s product categories to retailers and wholesalers in most countries in Europe, Latin and South America, and the Asia Pacific region and through distributors in those countries where it has no direct presence. The Entertainment and Licensing segment includes the Company’s consumer products licensing, digital gaming, television and movie entertainment operations.

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