When you are trading stocks online, you could come across some stocks that shine above the others in their industry. These should be identified.
In the entertainment industry there is one stock that shines significantly more brilliantly than the rest, and that is Walt Disney ($DIS). One of the big reasons for that is, Disney has focused on various channels of entertainment. That ensures its success is distributed, and the low performing segments do not affect the overall performance of the company. However, Disney has made all its businesses tools for long-term growth. This is important, since the entertainment industry is where success is based on the tastes of the consumer, which keep changing. That makes it riskier. Capital requirements are also great for straight-up movie productions. Disney’s success in diversification removes this risk factor associated with other entertainment stocks.
In spite of all the diversification, the studio division is still the primary revenue generator for Disney. And having three exciting brands - Pixar, LucasFilm and Marvel - in its arsenal has earned so much for $DIS. The income from these brands has far exceeded the several billion dollars for which each of these studios was bought.
It all began with animated movies, before the company diversified into theme parks and merchandising. And each of its studios is doing particularly well. LucasFilm has successfully rebooted Star Wars while its Rogue One and Episode VIII are highly anticipated forthcoming movies. Marvel is growing with its hugely successful Spiderman, Captain America and other movies and TV shows. Pixar is busy with Cars 3, while Pirates of the Caribbean: Dead Men Tell No Tales is on its way too.
Ever since Bob Iger took over at the helm in 2005, $DIS stock has managed to rise four-fold. Its current market cap stands at $157 billion. Last year its net income was $9.25 billion, and its stock had a P/E amounting to around 17 times earnings. Five-year growth estimates indicate 10% growth per year. Investors wanting to pick a winning stock for their long-term diversified portfolio will find Disney quite the right choice.
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