Cramer's 'Mad Money' Recap: Hasbro's Toys in the Attic

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As "toys have become hot again," market players must choose between owning Mattel (MAT Quote) and Hasbro (HAS Quote), Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

Cramer said that people shouldn't own both of these stocks because he believes in the importance of diversification.

Looking at the companies' gross margins and buyback programs, Mattel might seem like the "obvious buy" here; but in fact, Hasbro is the stock that's worth owning out of the two, he said.

"Toy companies will rise and fall based on the quality of their products," Cramer said. "And unlike Mattel, Hasbro has real toys in its pipeline."

For Mattel, all people can hope for is a reinvention of its Barbie or Elmo doll, he said. Although the company's American Girl has been performing well -- Cramer believes its Polly Pocket recall shouldn't hurt Mattel -- Hasbro has toys kids actually want to play with.

(Mattel is recalling 4.4 million Polly Pocket magnetic play sets, including 2 million sold outside the U.S., after three children were admitted to the hospital with serious injuries related to swallowing tiny magnets that fell off the toys, the U.S. Consumer Product Safety Commission announced Tuesday.)

Also, in addition to a recent deal Hasbro made with Marvel (MVL Quote) to make Spiderman toys, the company has Transformers, about which a movie is coming out next year, he added.