Disney Stock Performance Is Magical for Investors



Disney dominates the entertainment business

The Walt Disney Company (DIS) is a diversified entertainment company that also owns cable networks, including ESPN, the Disney Channel, and ABC Family. The company operates in five segments: Media Networks, Parks and Resorts, Studio Entertainment, Disney Consumer Products, and Disney Interactive.

On June 29, 2015, Disney announced the merger of Disney Consumer Products and Disney Interactive into one segment. The new segment, which will be called Disney Consumer Products and Interactive Media, will begin reporting as one entity in fiscal 2016, which begins in late September.

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Disney also owns and operates Walt Disney Parks and Resorts with locations all around the world. In addition, the company distributes films under Walt Disney Studios, which includes Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios, Disneynature, Disney/Lucasfilm, and Touchstone, the banner under which DreamWorks Studios produces films.

Disney’s stock price performance

Disney is a worldwide entertainment company that had a market capitalization of $195 billion as of July 9, 2015. Disney stock is performing very well, rising ~33% in the last year. This could be because the company’s net income of $4.3 billion in 1H15 is 14% higher than its net income in 1H14. This 14% growth in net income has significantly outperformed the S&P 500, which went up by only about 2% in that same period.

The stock price performance of Disney’s competitors fades in comparison. As the above graph indicates, Time Warner’s (TWX) stock rose about 22%, and 21st Century Fox’s (FOXA) stock fell about 11% in the past year.

Disney has also managed to beat the SPDR S&P 500 ETF (SPY), which has gone up only about 5% in the last year. SPY is an ETF that tracks the S&P 500 Index. You can get a diversified exposure to The Walt Disney Company (DIS) by investing in the iShares Core S&P 500 ETF (IVV), which holds ~1% of the stock.


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