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1 Big, Safe Stock to Profit From and Feel Good About

John Grgurich
July 5, 2012

Consumers are becoming more and more socially conscious and want the goods and services they use to measure up. In truth, it doesn't take much. A simple action that costs a company very little or nothing at all can make a real difference in the mind of the consumer.

Often, the added expenses a company incurs from paying workers a little more, monitoring resource sourcing, or going the extra ethical mile are small downsides when compared to the huge potential upside. And where there's company upside, there's investor upside.

Recently, Walt Disney (NYSE: DIS  ) has made significant strides in this area. Let's dive deep into this titan of American entertainment, evaluate its socially conscious policies and practices, and take a hard look at the numbers. We'll analyze the company in terms of its performance as a socially conscious enterprise, as a business, and as an investment.

Mickey Mouse wants America to get fit
Disney will start applying its own set of strict nutritional standards to any food advertising it does on all of its family oriented, Disney-owned media outlets by 2015. In addition, the company will be taking steps to make its theme-park food more healthy. Why the sudden concern for the country's health?

It's actually not so sudden. In 2006, Disney established its own internal nutrition guidelines, but has only recently pulled the advertising plan itself together. It was the first major media company to establish such guidelines. For the record, Disney can't implement the plan sooner because it has advertising contracts that reach out as far as 2015.

In short, Disney's groundbreaking guidelines:

  • Meet federal nutrition standards.
  • Promote fruit and vegetable consumption.
  • Call for limiting caloric intake.
  • Call for limiting fat, sugar, and salt intake.

But again, why is Disney on this tack at all? According to CEO Robert Iger: "Companies in a position to help with solutions to childhood obesity should do just that. This is not altruistic. This is about smart business." In the end, it doesn't really matter why Disney is doing what it's doing, so long as it's doing it. Way to go, Mickey.

Mainly healthy food, mainly healthy numbers
Now, let's look at a few basic metrics and see how Disney measures up as a business and an investment:

Revenue growth: Year-over-year revenue growth for the House of the Mouse was 6%, not staggering but healthy for a company as old as it is, and better than its rivals. News Corp. (Nasdaq: NWS  ) only grew its revenue by 2% YOY, Time Warner (NYSE: TWX  ) by only 4% YOY, and Viacom (Nasdaq: VIA