Mattel (NASDAQ:MAT) pulls back 3.6% this week, but still delivers shareholders respectable 12% CAGR over 5 years

The main point of investing for the long term is to make money. Better yet, you'd like to see the share price move up more than the market average. But Mattel, Inc. (NASDAQ:MAT) has fallen short of that second goal, with a share price rise of 77% over five years, which is below the market return. Over the last twelve months the stock price has risen a very respectable 8.7%.

Although Mattel has shed US$266m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

See our latest analysis for Mattel

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the last half decade, Mattel became profitable. That would generally be considered a positive, so we'd hope to see the share price to rise.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We know that Mattel has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Mattel will grow revenue in the future.

A Different Perspective

Mattel provided a TSR of 8.7% over the last twelve months. Unfortunately this falls short of the market return. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 12% over five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. It's always interesting to track share price performance over the longer term. But to understand Mattel better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Mattel .

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.