Walt Disney Co. (DIS) Stock Analysis

What a great time to come out with a dividend stock analysis, with the market taking a burn down, AGAIN.  This has allowed other stocks to pop up on the radar and intrigues me to dig a little deeper on a few stocks.  This time – we are going coast to coast, from country to country and I am getting geared up to have a nice little Fantasia on what Disney is all about.  We all grew up watching Mickey, Minnie, Donald and the gang as a kid, now time to look at them again as an adult or a dividend stock investor.  Let’s see what magic we can find here!

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The Stock – Walt Disney Co. (DIS)

Walt Disney Co. (DIS) – Think… ABC, ABC Family, ESPN, Disney, Pixar, Mickey Mouse, those ears, yes Mickey Mouse and those EARS!  Domestic and International – we all know and love Walt Disney.  No holds barred, no iffs, ands or buts about it.  For a summary – from Google, “The Walt Disney Company together with its subsidiaries and affiliates is a diversified international family entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive media. Media Networks comprise an array of broadcast, cable, radio, publishing and digital businesses across two divisions – the Disney/ABC Television Group and ESPN Inc. Walt Disney Parks and Resorts (WDP&R) is a provider of family travel and leisure experiences. The Walt Disney Studio brings movies, music and stage plays to consumers throughout the world. Disney Consumer Products (DCP) delivers product experiences across thousands of categories from toys and apparel to books and fine art. Disney Interactive is a creator of interactive entertainment across all current and emerging digital media platforms.”

DIS – Dividend Diplomat Screener Analysis

Well, as of this writing on 8/22/15 – the stock is trading at $98.87.  They are over $166B in market capitalization and are a strong branded company.  You would definitely peg this company as one of the low yield, high dividend growth companies to be on the lookout for.  Using the dividend diplomat stock screener, lets check the stats and against 2 competitors from Morningstar and Google:

Disney

  1. Price to Earnings – Forward earnings are looking to be $5.08 now based on the analysts for 2015.   With the current price, this means the P/E is roughly 19.46 – right around S&P’s ratio and is a bit higher than the industry average.
  2. Dividend Yield – Current yield is a low 1.34%; which my portfolio overall is currently at 4.05%.  Not sure I like it THIS LOW, but the item in #4 can help…  Remember, this is a company who has expanded their dividend yield by an insane amount…
  3. Payout Ratio – Much room to grow here; at a very LOW end, especially when compared to Comcast and Time Warner at only 26%.  Much room to continue to grow this dividend growth heavy yield for years and years to come.
  4. Dividend Growth Rate – As well all know, the power of the growth rate is real.  The Dividend growth over 5 years is higher than the othe r2 at 43% essentially; with the biggest weigh tcoming from this year.  They have quite a bit of cash and have had quite the journey to get the dividend where it’s at.  We are lucky that the 52 week high point for this stock was at $122.08 (essentially is down $23.21 per share or 19%; helping the yield + dividend growth combo work great together.  This growth rate is obviously way higher than my overall weighted average growth rate by probably 7x.  I think they can keep a double digit growth rate for years to come.
  5. Share Buy Back – See why this is big news for dividend investors and is a good note to consider for Disney as  the amount of – 1,687,857,933 as of the filing of the recent 10Q for the 2nd quarter, vs the 2nd quarter last year share amount of 1,716,544,546 or a decrease of 28,686,613 / 1.7% decrease.  This allows for maintaining EPS, reducing payout and/or increasing that dividend amount that we love.  NICE.

Conclusion on DIS Stock Analysis

I think as of right now – I am going to hold off on Disney.  Moreso – I think there is more value to be had in the market, as well as the potential to keep cash piling up right now to make a purchase.  The markets are taking a downturn consistently, and it may be time to gather the army of capital to deploy here soon.  With that, I think time will bring Disney down potentially more, and maybe aim higher than the 1.34% yield; which I thought, for some reason with the extreme price decline, that it would be yielding somewhere in the 1.5-1.7% ball park.  Obviously, can’t argue with the growth rate at all, which could continue to add fuel to the fire after I recently crushed over the projected $6,000 mark this year.   Also, Disney is one of those companies that is well diversified in the entertainment industry with movies, TV, theme parks and consumer goods.

What does everyone else think of Disney right now?  Would you purchase at these levels?  Like where the market is going?  Any takers here?  Love the feedback and excited to hear back!  Thank you again for stopping by to check this out.

-Lanny

DISCLOSURE: I DO NOT RECOMMEND ANY DECISION TO THE READER OR ANY USER, PLEASE CONSULT YOUR OWN RESEARCH. THIS IS ACTUAL DATA, ANALYSIS, HOWEVER I BASE NO INVESTOR RECOMMENDATION.  THANK YOU FOR YOUR UNDERSTANDING.
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16 thoughts on “Walt Disney Co. (DIS) Stock Analysis

  1. Ciao Lanny,

    I have a small position into Disney and might add something soon enough, but to me they are not a core holding, actually it’s one of the few “bets” that I have in my PF at the moment. By “bet” I mean a company that I believe will deliver a good growth both in dividend and share price in the future. It’s hard to compare them to anyone out there, and this makes them both special and dangerous at the same time.
    I didn’t like the huge drop though, in part is fuelled by the market downturn, but in part is also the ESPN performance that is not convincing…

    Ciao ciao

    Stal

    • Stal,

      Thanks for the post. I can see why they wouldn’t be a core holding, with the current low yield on the stock.

      I know they will have solid growth in the dividend, and with share buy backs. I know I shouldn’t speculate the market, but buy on the dips, and if you think it’s overvalued, don’t buy. I am not buying because I think it’s slightly overvalued still.

      Thanks for coming by Stal!

      -Lanny

  2. I want to add a small position of Disney to my portfolio even though the YOC is low, but I personally will wait a little bit, hoping that it drops to 85 $ or so…
    The week ahead seems so difficult… good prices and not so much money to purchase (in my case).

    • Rulita,

      I agree – I am holding off on Disney until the price comes down further. The P/E is a tad high in my opinion to purchase. However, I think it’s a PHENOMENAL company and I will continue to monitor of course. Thank you for stopping by!

      -Lanny

  3. I have some DIS in my portfolio. Not much, but I bought it when it at about $92/share, so it’s been good to me thus far. It’s only gone up since then and the dividend while low, has nowhere to go but up. So it’s a nice piece of diversification.

    – HMB

    • Gremlin,

      I do wish I had more capital; the fire sale was incredible in the opening minutes today; just purely a phenomenal sight. I kept telling people – Damn, I wish I had 10K! Best of luck to us to try and take advantage of the discounts.

      -Lanny

  4. Last time I checked DIS, it was clearly overvalued at $100+. The valuation I made was more around $45. So yeah, should continue to wait before buying. But I still think it’s a great stock with very high growth potential.

    Cheers,

    Mike

    • Mike,

      How amazing is that – should def wait; dropped a few more $ today and I still feel it should be a few $ lower for me to start really rubbing my chin. We’ll see… talk about a roller coaster today though out there.

      -Lanny

  5. Bought 100 shares @ $95 even if dragged down a little more, I have no doubt the next 3 years will be very profitable. I think by Q1 2016 should see pretty good growth which should continue. Lots of great movies and licensing deals ahead.

  6. Pingback: 13 Magical Gifts All Diehard Disney Fans Must Ask for This Holiday Season | Celebs Rumor

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