What are we looking for?
Sustainable dividends from companies steeled by Marvel or other superhero franchises.
A torrent of accolades marked the death of Marvel Comics icon Stan Lee this week. The reaction highlights the continuing success of superhero movies. Marvel characters, including Spider-Man and Black Panther, have blockbuster appeal worldwide.
Superhero productions are also profitable on Netflix and other streaming services. Disney’s service – Disney Plus – will join them in late 2019 and showcase new iterations of its Marvel, Star Wars and other characters.
Our search started with stocks whose strong prospects are strengthened by superhero franchises. We then applied our TSI Dividend Sustainability Rating System. It awards points to a stock based on key factors:
- One point for five years of continuous dividend payments – two points for more than five;
- Two points if it has raised the payment in the past five years;
- One point for management’s commitment to dividends;
- One point for operating in non-cyclical industries;
- One point for limited exposure to foreign currency rates and freedom from political interference;
- Two points for a strong balance sheet, including manageable debt and adequate cash;
- Two points for a long-term record of positive earnings and cash flow sufficient to cover dividend payments;
- One point if the company is a leader in its industry.
Companies with 10 to 12 points have the most secure dividends, or the highest sustainability. Those with seven to nine points have above-average sustainability; average sustainability, four to six points; and below average sustainability, one to three points.
More about TSI Network
TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor. The TSI Best ETFs for Canadian Investors is the latest. TSI Network is also affiliated with Successful Investor Wealth Management.
What we found
Our TSI Dividend Sustainability Rating System generated six stocks. Industry giant Walt Disney Co. purchased Marvel in 2009 for US$4-billion. It also owns the Stars Wars franchise. Japan’s Sony Corp. holds the rights to Marvel’s lucrative Spider-Man characters, including current hit movie Venom. (Before its sale to Disney, Marvel cleaved off exclusive movie rights to Spider-Man – including related characters such as Venom – and sold them to Sony.) Toy maker Hasbro Inc. now owns kids-friendly Power Rangers and has a new film in development. Viacom Inc.’s Paramount Pictures will pump out more popular Teenage Mutant Ninja Turtle movies. Telecom giant AT&T Inc. harnesses its own superhero power through ownership of Warner Bros., and the DC Comics universe, which includes Wonder Woman and Batman. And finally, while Cineplex Inc. shares lost ground this week, it will continue to gain from the release of superhero blockbusters.
We advise investors to do additional research on investments we identify here.
Scott Clayton, MBA, and James Bates, CFA, are associate editors at TSI Dividend Advisor.