3 Things Mattel Investors Expect From New CEO Georgiadis At This Week's Investor Day

Shares of Mattel, Inc. MAT continue flirting with its 52-week lows of $21.55 ahead of the company's Investor Day presentation (on June 14) and expectations are relatively high, Wells Fargo's Timothy Conder noted in a research report.

Mattel's top priority would be for CEO Margo Georgiadis to outline a game-plan which touches on the following three concerns:

1. How will the portfolio brand be expanded on to generate sustainable revenue growth.
2. How will the portfolio brand be expanded across digital media to be more accessible to consumers.
3. Status/development of any data analytics and consumer insights relative to the company's competitors.

Mattel won't necessarily need to undertake any material incremental capital spend to address investor concerns, Conder stated. But the company will likely need to reallocate capital and if done properly it can add to Georgiadis' credibility.

In fact, if investors are satisfied with Mattel's presentation, management will be given latitude into 2018 to:

1. Operationally execute.
2. Create new content, products and partners.
3. Issue new financial guidance.

Dividend Cut

Another concern heading into the presentation is the stock's dividend yield which stands at nearly 7 percent. Ironically, a reduction to the $1.52 per share annualized dividend would be viewed as a positive development and investors should be concerned if the dividend isn't cut, Conder added.

Cutting the dividend would remove the ongoing overhang plaguing the stock and, in reality, gives Georgiadis and the board a "one-time free pass" to slash dividends to focus on a turnaround plan. In addition, a dividend reduction provides additional financial flexibility and will be viewed favorably by the rating agencies.

Bottom line, investors should continue buying Mattel's stock ahead of the presentation as there are "multiple ways for value oriented investors to win," the analyst stated.

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