Is Lego Stock Publicly Traded?

The global toy market was worth approximately $95 billion in 2020, and is expected to grow further still to $120 billion by 2023.

The leading player in this burgeoning industry is the well-known Danish toy manufacturer Lego, whose famous interlocking plastic bricks have been a constant staple in the lives of many generations of children. Indeed, Lego has solidified its reputation as the premier toy company in the world right now, with revenues for the first-half of 2021 exceeding $3.5 billion.

But how can traders most profit from this growing sector, and is Lego their best, and only, choice?

Does Lego Have A Stock?

Unfortunately for regular investors, Lego is a private enterprise at the moment, meaning that its shares are not available for purchase on any of the usual stock exchanges at which public companies are normally listed and traded.

In fact, the business has always been a privately-owned family affair, ever since its inception in 1932, when joiner and master carpenter Ole Kirk Kristiansen began producing and selling his own range of small wooden toys. It wouldn’t be until 1947, when the company got hold of its first plastic injection molding device, that the firm would begin manufacturing its distinctive little Lego bricks – a practice that, to the relief of many small children (and adults alike!) continues to this day.

Who Owns The Lego Company Now?

The descendants of founder Ole Kirk Kristiansen continue to hold a majority 75% stake in the Lego company through their private holding and investment group Kirkbi, while the remaining 25% is retained by The Lego Foundation, an organization which seeks to empower children through play and learning.

At the present time, the family shows no sign of taking the Lego company public – however, it’s interesting to note that neither the firm’s CEO, Niels B. Christiansen, nor its executive chairman, Jørgen Vig Knudstorp, are members of the ancestral clan.

That said, ownership of the business is still firmly in the hands of the Kristiansens, with Ole Kristiansen’s grandson and great-grandson – Kjeld Kirk Kristiansen and Thomas Kirk Kristiansen – occupying the position of deputy chairman and chairman respectively.

Is Lego A Publicly Traded Company?

As discussed earlier, Lego isn’t actually a publicly listed company, but there was a business, Legato Merger, that traded under the deceptively similar LEGO ticker on the Nasdaq exchange up until late 2021.

However, the shell company combined with Algoma Steel Group Inc., and now operates as a new business with the newly minted ticker ASTL.

Is Lego Worth Investing In?

Perhaps the most depressing thing for investors looking at the Lego company from a speculator’s perspective, is the fact that the company is so well-run, generating healthy profits along the way with a clear plan for continued expansion, especially in China.

Taking the company’s most recent financial reporting, the firm seems to have benefited from pandemic tailwinds, seeing its total sales rise by 46%, grabbing market share in the process and outperforming rival toy makers and the wider industry as a whole.

Operating profits for the first-half of last year spiked 104% to $1.3 billion, while its net profit also increased 140% to $989 million.

For the same period, Lego’s consumer sales rose 36%, boosted by growth in its LEGO Star Wars, LEGO City, and LEGO Harry Potter product lines. Online sales jumped 50% across Lego’s own platforms and those if its partner retailers, most likely due to the stay-at-home trends witnessed during the Covid-19 outbreak.

In addition to, and because of, these promising financial developments, LEGO Group CEO Niels Christiansen also stated that the company can now begin to further invest in “sustainability and digitalization” efforts, building on a year in which the brand opened another 60 LEGO-themed stores, taking its total network of retail outlets to 737, 291 of which are located in China.

So yes, if Lego was a public company, given what we know of the business already, it would most definitely make for a very, very good investment.

Did Disney Buy Lego?

Although Disney doesn’t actually own Lego, the two companies have collaborated closely together now for a number of years, forming some very lucrative product lines, as well as launching a popular franchise of Lego-inspired movies.

Indeed, Lego’s association with Disney goes back to 1999, when the toy manufacturer first licensed a Winnie the Pooh Duplo sub-range. The partnership would go on from there to encompass many more Duplo lines, including Mickey Mouse and Friends, Sofia the First, and Jake and the Never Land Pirates.

It’s perhaps the Lego Movie franchise, begun in 2014, that might resonate the most with fans, with the films receiving both a positive critical response from reviewers, while generating plenty of income to boot. In fact, its box office performance saw total worldwide revenues of $1.1 billion from a budget of just $310 million.

Lego Stock Alternatives

OK, so it’s not possible to invest in Lego at the moment, but that doesn’t mean there aren’t other alternative ways to get exposure to the toy market at the present time. Below we’ll take a quick look at four companies that are good options for investors who are keen to profit from this growing industry.

Mattel

Just like Lego, Mattel has enjoyed the pandemic-fueled tailwinds of late, helping to contribute to the company posting a solid bottom-line of $2.29 per share for the third quarter 2021, up handsomely from just $1.40 at the same time last year.

But with customers certain to abandon the “play at home” trend as the crisis abates, this boost to the firm’s balance sheet can no longer be relied upon.

The good news for Mattel, however, is that the business has found an unlikely growth-driver in the form of the fashionable NFT market, with the brand launching its own digital offering on the back of its Hot Wheels collection.

The NFTs – or Non-Fungible Tokens – sold out within the hour of going on sale, and had already risen in value on the secondary NFT markets within a matter of days.

Whether this move into what is essentially the crypto-currency arena will pay off for Mattel remains to be seen, but given the rapid adoption of block-chain technologies across the whole economy in general, it’s a fair bet that it will. However, there’s a huge dose of risk associated with this strategy – but given the vast upside potential of this untapped market, it’s definitely a risk worth taking.

Hasbro

Hasbro is a true megalith in the toy manufacturing space, with a total market cap above £14 billion, and a reputation that goes back almost a century.

But the company isn’t one to rest on its laurels – indeed, it can’t; the business offers a great dividend that pays out at a yield of 2.46%, and its commitment to returning value to investors is paramount.

As such, Hasbro has been aggressively improving its margins over the years, which necessarily entailed the firm shifting a large fraction of its manufacturing base to China. This approach isn’t unique for the sector: about 80% of all toy imports to the United States come from China, and that doesn’t seem likely to change soon.

However, in a bid to be less reliant on China, Hasbro has sought to move its production efforts to other territories, such as Vietnam and India. This move is logical from both a financial position and a political one too, especially given the on-going trade war between China and the US.

Hasbro’s share price is up nearly 10% over the last twelve months, but its path there has been pretty erratic. Given that the company has a low price-to-sales ratio of 2.27 at the moment – coupled with an enviable EBITDA margin of 20% – investors might see this as a great opportunity to buy a quality dividend stock at a very neat discount.

Disney

If you’re looking for a business that gives you access to the physical toy market and a whole lot more, then The Walt Disney Company might just be the golden ticket.

The Burbank-based multinational media conglomerate is an enterprise with fingers in many high-growth segments, with its video streaming service, Disney+, now boasting 118.1 million paid subscribers at the close of fiscal 2021, and its theme parks and resorts seeking to make a comeback now that the pandemic headwinds that shuttered its operations are receding.

But the big draw for investors at the current time might be the possible reinstatement of its dividend, which Disney had to suspend in 2020 over fears of a steep downturn in the wake of the Covid-19 crisis. Up until then, however, the company had consistently delivered its pay-out for over 40 years, with many seeing the firm as a reliable dividend pick.

Disney’s CFO, Christine McCarthy, has alluded to such a return, suggesting that, in the long-term, dividends and share repurchases will be part of its capital allocation strategy.

Funko

Somewhat of a minnow compared to the others on our list of Lego alternatives, Funko is a growth-play in an industry not known for such things, with sales increases for the first nine months of 2021 up 63%, going from $426 million in 2020, to $693 million this time round. However, Funko’s stock price has reflected this expansion, accelerating 72% over the last year to $18.40 per share.

The company is best known for its range of pop culture figurines, and has partnership deals with many important franchises, including the NFL, the NBA, Marvel and Disney. But despite its huge growth in 2021, there’s still plenty of value left remaining in this business, with the firm’s forward price-to-sales multiple sitting at an enticingly low 0.76.

Add in the fact that Funko raised its guidance for both its EBITDA margin and its net sales for the rest of 2021, the promise of a profitable 2022 is very much still on the cards.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.