Stranger In a Strange Land

I’ve been spending time in Baltimore with my three nephews ages 5, 3½, and 1½. Although I visit here and there, I always face a bit of a learning curve when I’m in town. My brother’s house is the complete opposite of my minimalist approach. I’m finally proficient with the baby gate at the top of the stairs and getting them buckled into car seats.

According to Lending Tree, it costs $297,674 to raise a child to age 18. The global kids apparel market was valued at $225.8 billion in 2025 with a projected compound annual growth rate of 7.25% through 2034. And the global toys market is worth over $316 billion annually.

So, you know I went digging for dividend payers in those spaces.

Unfortunately, I found a solid list of companies with suspended or reduced dividends. It included The Children’s Place (PLCE), Disney (DIS), Mattel (MAT), and Carters (CRI). However, the search did put two stocks back on my radar.

Two Interesting Watch List Additions

The first one is quite familiar to my three nephews. Hasbro (HAS) is the parent company of Nerf, Marvel, and Play-Doh. Its games division includes one of our favorites: Don’t Break the Ice. HAS hasn’t appeared in any of my stock screeners recently, so I was surprised to see that shares are up 51% over the past year.

A quick look at earnings shows a negative payout ratio, and its GAAP loss is a result of numerous write-downs and impairments. Looking closer, the company hit a record $1.1 billion in adjusted operating profit for the full-year 2025. Revenues were up 14% as well.

I was shocked to find that role-playing, trading card studio Wizards of the Coast, and digital gaming generate over 80% of Hasbro’s operating profit. I don’t want to add a gaming company to my portfolio, especially one with just a 3% annual yield.

The second is a company I’ve been fascinated with for years, but is haunted by debt from a past acquisition. Newell Brands (NWL) is the parent company of a number of household brands, including Rubbermaid, Sharpie, Coleman, Yankee Candle, and Sunbeam. It also owns car seat and stroller brands Graco and Baby Jogger.

I would love to have exposure to all these brands. They continue to be purchased by loyal customers. However, it’s been downhill since the deal in 2016 that combined Newell, Rubbermaid, and Jarden Corp.

The brands never fully integrated and the company eventually cut its dividend in 2023 as liquidity concerns remained across the balance sheet. Margin improvement and management optimism are not enough to offset the dwindling gross profit.

This is one of those stocks that I revisit once a year to see if a turnaround might ever be viable. Ten years later, I’m still not convinced.

Sticking with Consumer Staples

Although I didn’t find a viable investment specific to the children’s market, I’ll still get exposure through large companies with sizable sales in that sector.

Target Corp. (TGT) reported that its toys segment was among the departments with net sales growth during the fourth quarter. On top of that, its in-house apparel brand, Cat & Jack, generates $3 billion in annual sales. The company’s progress over the past few years to improve its digital channels make it a one-stop shop for busy families.

Remember, the company is still in a strategic transition phase with some uncertainty, but markets are seeing signs of a turnaround. Shares are up 30% over the past six months and are now slightly above my buy-up-to price needed to grab a 4% yield.

Other ways to get exposure would be Kimberly-Clark (KMB) and Kenvue (KVUE). KMB is a giant in the diaper business with its Huggies, Pull-Ups, and Goodnites brands. KVUE is found in bathroom cabinets all over the world, with the majority of its brands offering specific products for kids.

I lumped these two together because KMB will be acquiring KVUE later this year. The combined powerhouse company should continue to pay a solid dividend for many decades to come.

I am always on the lookout for markets with staying power as we march into the future. The children’s market is a great example. Maybe by 2030, we’ll see some of those cut or suspended dividends back on the table. But for now, consumer staples exposure will have to do.

For more income, now and in the future,

Kelly Green