For many years, Hasbro (NYSE: HAS) and Mattel (NYSE: MAT) turned in lackluster annual results, as sales and profits grew at a snail’s pace. Both of these toymakers only recently learned how to boost sales, cut costs and reduce the share count, but only one also took a page from Marvel — purveyor of comic books, toys and mega-blockbuster movies based on its vast stable of characters. If there was any doubt about it, these moves have created an impressive path toward ongoing profit growth for Hasbro.

A quick glance at Hasbro’s 2010 forecasts gives the impression of a company that has squeezed out all remaining profit growth. Analysts actually expect per share profits to slightly drop this year, but that obscures a far brighter picture. Hasbro’s transformation began — and will continue — with the Transformers movies, the first of which was a blockbuster hit in 2007. The movie featured Hasbro’s own characters, and offered a clear departure of producing toys tied to characters that are owned by other entertainment firms.

Sales of Transformer toys spiked from $100 million to $500 million that year, and actually stayed at that elevated level the next year, even though there wasn’t a fresh movie to support it. Last year’s release of Transformers: Revenge of the Fallen kept toy sales at that high pace, and management intends to keep the ball rolling with a third Transformers movie set for release next year.

The impact of Transformers has been profound. From 2001 to 2006, annual sales were stuck in the $3 billion range. But in the past three years, they leapt to the $4 billion mark (aided as well by other positive sales trends for other toys). Management has articulated plans to get sales to the $5 billion mark. For starters, Hasbro is expected to participate in a host of new feature films that tie into other toys and games such as Battleship, Stretch Armstrong, Monopoly, Oujia, Clue and a GI Joe sequel. Most of those films, assuming they receive the green light, will be released in 2012 and 2013.

Hasbro has also invested $300 million in television programming, inking a 50/50 joint venture with Discovery Communications (Nasdaq: DISCA) to launch the Discovery Kids network. The network trails Nickelodeon, the Disney channel and the Cartoon Network, but the gap is closing fast — viewership is up roughly +200% during the last decade. The TV investment has been a drag on profits but should soon start to bolster them. Discovery Kids’ will soon be re-launched as “The Hub,” and will feature hundreds of hours of new programming. Notably, analysts appear to have held off reflecting the steady improvements in Discovery Kids’ viewership and profitability

Hasbro’s steadily rising sales have been accompanied by expanding profit margins. Operating margins were stuck in the 10.0% range in the middle of the last decade, but steadily climbed to 14.5% in 2009. As the TV network starts to generate cash, and as toy sales from those movie tie-ins start to build, operating margins could approach 16% or even 17% in the next few years.

That improving profit trend led management to embark on plans to issue debt simply to buy back stock. The $625 million plan, announced last month, could reduce the share count -15% by the end of next year. There is a precedent: buybacks reduced shares outstanding by an average of -10% in 2006, 2007 and 2008. Put another way, shares outstanding, which stood at 197 million in 2006, could fall below 140 million by the end of next year. Here again, analyst models do not yet factor in a further sharp drop in the share count.

Increasingly, it looks as if Hasbro has a host of positives that are not yet incorporated into analysts’ forecasts. For example, analysts think the company will earn a bit more than $3 a share next year, but barring an economic swoon — $3.50 is looking increasingly likely. And as those new movies roll in during 2012 and 2013, per share profits could handily top the $4 mark. As investors look out the horizon and award the stock an earnings multiple in line with the broader market, shares could trade up to 15 times that $4 a share projection, or $60 — a nice +50% gain from current levels.

Equally important, it’s hard to envision a scenario where sales or the stock would sharply slump form current levels. After all, toy sales remained flat, even as demand for many other discretionary items fell sharply in 2009. This is a stock with low risk and potentially high reward. You don’t find that often.

*StreetAuthority owns shares of Hasbro (NYSE: HAS).