Should You Prefer Hasbro, Inc. (HAS) or Mattel, Inc. (MAT)?

After trading near $19 per share exactly one year ago, the stock has gone on a nearly uninterrupted collapse down to its current level of $10 per share. The stock has lost almost half its value over this time period, due primarily to falling sales and profits.

JAKKS’ sales fell almost 2% last year and have fallen every year since 2008. That’s never a good sign, particularly in a time when the economy was in recovery.

Furthermore, exploding interest expense has dealt an additional blow to the company. JAKKS saw interest expense nearly quadruple in 2012 versus 2008 levels, and the company lost $4.37 per share last year.

Shareholder rewards aplenty

Despite the differences in sales performance over the past few years, both Hasbro and Mattel have given investors healthy dividend increases since the recession ended. This is because, even though sales aren’t exactly booming, both companies are cutting expenses and buying back stock to boost profitability. This has allowed them to keep their dividend streams flowing.

Hasbro and Mattel are often mentioned as among the market’s premier dividend stocks, both for their hefty payouts and their practices of increasing their dividends on an annual basis. Their dividend growth is a stark contrast to JAKKS Pacific.

Whereas JAKKS cut its dividend 30% in early 2013, Mattel and Hasbro both recently gave their investors healthy pay bumps.

Hasbro raised its first-quarter dividend 11%, and has doubled its payout over the past five years. Mattel raised its own dividend by 16% in the first quarter and has also nearly doubled its dividend over the past five years.

On the bright side for JAKKS investors, the company still yields 2.8%, but its financials and dividend are going in the wrong direction. Hasbro and Mattel are extremely similar stocks. Mattel trades for a slightly higher multiple and yields slightly less than Hasbro, but it’s undeniably executed better in the years since the recession ended. As the saying goes, premium stocks command premium valuations.  As a result, I’d consider Mattel to be the winner of the toy wars.

The article Should You Prefer Hasbro or Mattel? originally appeared on Fool.com.

Robert Ciura has no position in any stocks mentioned. The Motley Fool recommends Hasbro and Mattel. The Motley Fool owns shares of Hasbro. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.