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Disney Keeps Rising as the Dow Flatlines to End the Year

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The year's coming to a close and stocks are slumbering heading into 2014. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has barely pushed past the breakeven point today and is hanging flat as of 2:15 p.m. EST, with most of its 30 blue-chip stocks sitting slightly in the green so far. Despite the sluggish day, Disney's (NYSE: DIS  ) blowing away the Dow Jones with huge gains, adding one last burst of gains to its stellar 2013 run. Let's catch up on what you need to know.

Disney keeps on rolling
Disney's been a Dow darling this year, picking up more than 51% year to date on its ascent, and the stock's adding to its great year with a 2% gain today. Disney's stock grabbed an upgrade from Guggenheim today, but the story hasn't changed at this entertainment giant: Disney's star is still as bright as ever, despite its big run-up through 2013.

Even though Disney made big news through its acquisition of Star Wars-producing Lucasfilm and its knockout Marvel films, the company's box office revenue hardly has been the biggest story for this company in 2013. In fact, Disney's studio entertainment division has seen the slowest growth rate among any of its major divisions, with revenue growing just 3% year over year in the company's most recent fiscal year.

It's been the power of Disney's media brands under its media networks division that has propelled this company -- and stock -- higher. Disney estimated in its most recent 10-K report that it has 99 million subscribers to its ESPN network, with another 99 million for its domestic Disney Channel and a further 172 million subscribers for its international Disney Channel. That's a lot of eyes on the House of Mouse's major television brands, and it's paid off with the company's largest segment by revenue seeing sales grow 5% year over year. Given Disney's breadth, it doesn't look like those numbers are going to slow down anytime soon, either.

Merck's (NYSE: MRK  ) having a slow day today in health care, with the stock hanging flat despite a report from The Wall Street Journal on Friday outlining the company's plan to revamp its research and development division. The WSJ reported that Merck's looking to start up hubs around the world to sniff around the biotech sector for smart acquisitions that could bolster the company's drug pipeline.

Questions have lingered for some time over Merck's costly R&D group as the drug pipeline has lagged. According to the WSJ, the company's also looking potentially to deal away some of its compounds under development in the revamp, a move that could save money -- a big point for investors who have wanted more despite the stock's 26% run-up year to date.

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Despite Merck's questions, this stock-and many other big-name picks-have excelled during 2013's big rise. Millions of Americans have waited on the sidelines since the market meltdown in 2008 and 2009, too scared to invest and put their money at further risk. Yet those who've stayed out of the market have missed out on huge gains and put their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.

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Related Tickers

9/30/2016 5:01 PM
^DJI $18308.15 Up +164.70 +0.91%
DIS $92.86 Up +1.06 +1.15%
Walt Disney CAPS Rating: *****
MRK $62.41 Up +0.50 +0.81%
Merck and Co. CAPS Rating: ****