Is Disney Stock a Buy? A Quick Analysis

I don’t do a ton of individual stock analysis on Finance Gourmet because everyone’s investing goals are so different that when I’m saying Disney is a buy, I mean Disney is a buy for me based upon my investment objectives and existing portfolio. That might be totally different than other’s investing strategy.

Is Disney a Good Company?

Disney is a large, diversified company that operates in various industries, including media and entertainment, parks and resorts, and consumer products. However, Disney does not pay dividends, and in a world full of great companies, why would I pick one that doesn’t pay dividends?

Like many other companies, Disney may choose not to pay dividends to reinvest its profits in the business or for other strategic reasons. Dividend policy is ultimately determined by a company’s board of directors and can change over time depending on the company’s financial performance and other factors.

Is Disney the Biggest Media Company?

Disney is one of the largest media and entertainment companies in the world. The company has a diverse portfolio of businesses, including its iconic theme parks, its film and television studios, and its consumer products division. Disney also owns several cable and television networks, including ABC, ESPN, and the Disney Channel. However, there are other media companies that are also large and influential, such as Comcast and AT&T. It is difficult to determine which company is the biggest based on a single metric, as the size and scope of media companies can vary greatly.

Is Disney Stock Priced to Buy Now?

One of the reasons I got interested in Disney is because it is trading near its 3-year low in a market that has carried all stocks lower, so being at a long-term low like that sounds more like the stock’s minimum price rather than a place the price will drop much from. The 50-day and 20-day moving averages are converging right on top of the stock price here. As far and pricing and technical indicators go, it doesn’t get too much better than snagging some Disney shares at this level.

Disney stock chart
Disney 3-year chart with moving averages – 12/9/2022

Disney Dividends

Of course, I like to be paid to hold on to stocks while my predictions come true. Dividends are the payment. Disney does not pay dividends. This is concerning for several reasons. One, Disney is a huge company. Expecting high growth from it is a fool’s game, but not paying a dividend signals that the company is shooting for growth, when in fact, it really doesn’t have much more upside. Number one is number one.

For example, I purchased some Apple stock much higher than it trades right now. That is irrelevant however because I know Apple stock will eventually trade higher and I have no intention of selling it until then. My opportunity cost is compensated by Apple in the form of an annual dividend of $0.92 per year for each share I own.

In other words, Apple pays me until they get around to getting the price I want for my stock, something in the neighborhood of almost $200, I would say. Again, there is a solid 5% upside from here just based on when the stock market as a whole turns around, before taking into account any performance of the company itself.

Author

By Brian Nelson – Brian is a former Certified Financial Planner and financial advisor. He writes about personal finance and investing for the Finance Gourmet and other financial publications. The material provided on this website is for informational use only and is not intended for financial or investment advice. At the time of publication, Mr. Nelson owned shares of Apple stock, however, that may change at any time without notice. Please also note that this material may not be updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment options

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