Critical Survey: Funko (NASDAQ:FNKO) versus Mattel (NASDAQ:MAT)

Mattel (NASDAQ:MAT) and Funko (NASDAQ:FNKO) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Volatility and Risk

Mattel has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500. Comparatively, Funko has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Earnings and Valuation

This table compares Mattel and Funko”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mattel	$5.35 billion	0.71	$397.58 million	$1.36	9.71
Funko	$908.21 million	0.35	-$67.36 million	($0.04)	-140.50

Mattel has higher revenue and earnings than Funko. Funko is trading at a lower price-to-earnings ratio than Mattel, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

97.2% of Mattel shares are owned by institutional investors. Comparatively, 99.2% of Funko shares are owned by institutional investors. 1.9% of Mattel shares are owned by insiders. Comparatively, 3.9% of Funko shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Mattel and Funko’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mattel	7.79%	16.20%	5.37%
Funko	-0.21%	2.61%	0.71%

Analyst Ratings

This is a breakdown of recent recommendations for Mattel and Funko, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mattel	3	5	5	1	2.29
Funko	1	2	1	0	2.00

Mattel currently has a consensus target price of $17.80, indicating a potential upside of 34.75%. Funko has a consensus target price of $7.08, indicating a potential upside of 26.04%. Given Mattel’s stronger consensus rating and higher possible upside, equities analysts plainly believe Mattel is more favorable than Funko.

Summary

Mattel beats Funko on 12 of the 15 factors compared between the two stocks.

About Mattel

Mattel, Inc., a toy and family entertainment company, designs, manufactures, and markets toys and consumer products in North America, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. The company operates through North America, International, and American Girl segments. It offers dolls and accessories, as well as books, content, gaming, and lifestyle products for children under the Barbie, American Girl, Disney Princess and Disney Frozen, Monster High, and Polly Pocket brands; die-cast vehicles, tracks, playsets, and accessories for kids, adults, and collectors under the Hot Wheels, Hot Wheels Monster Trucks, Hot Wheels Mario Kart, Matchbox, and Cars brand names; and infant, toddler, and preschool products comprising content, toys, live events, and other consumer products under the Fisher-Price, Little People and Imaginext, and Thomas & Friends, and Power wheels brands. The company also provides action figures, building sets, games, and other products under the Masters of the Universe, MEGA, UNO, Jurassic World, Minecraft, WWE, Lightyear, and Star Wars; and licensor partner brands, including Disney Pixar, Microsoft, NBCUniversal, and WWE. It sells its products directly to consumers through its catalog, website, and proprietary retail stores; retailers, including omnichannel retailers, discount and free-standing toy stores, chain stores, department stores, and other retail outlets; and wholesalers, as well as through agents and distributors. Mattel, Inc. was founded in 1945 and is headquartered in El Segundo, California.

About Funko

Funko, Inc., a pop culture consumer products company, designs, sources, and distributes licensed pop culture products in the United States, Europe, and internationally. The company provides media and entertainment content, including movies, television (TV) shows, video games, music, and sports; figures, handbags, backpacks, wallets, apparel, accessories, plush products, homewares, and digital non-fungible tokens; and art prints and vinyl records, posters, soundtracks, toys, books, games, and other collectibles. It markets its products under the Pop!, Loungefly, Funko, Mystery Minis, Bitty Pop!, Funko action figures, Funko Plush, and Funko Soda brand names; and licenses its properties under the classic evergreen, movie release, current TV, and current video game categories. The company sells its products through specialty retailers, mass-market retailers, e-commerce sites, and distributors; and at specialty licensing and comic book shows, conventions, and exhibitions, as well as through its e-commerce business. Funko, Inc. was incorporated in 2017 and is headquartered in Everett, Washington.