Over the last 50 years The Walt Disney Co. (NYSE:DIS) has delivered an incredible total return of roughly 7,800% for shareholders.

That means if you'd invested $12,900 in Disney stock in September 1968, set your dividends to reinvest, and let time do the rest, your holdings in the company would be worth over $1 million today. If you missed out on the buying opportunity in 1968, it's not as though the millionaire-making train had left the station. A $36,500 investment in 1988 with dividends reinvested would have given you Mouse stock worth just over $1 million today.

Shares are up roughly 300% over the last decade, but gains have been more muted in recent years as profit pressures on the company's crucial media networks segment have tamped down on earnings growth, leading some to question how much upside is left for the House of Mouse. Expecting the stock price to grow more than 70-fold over the next 50 years, or 25-fold over the next 30 years is probably a recipe for disappointment, but there are good reasons to think Disney can still be a big winner for your portfolio.

A person holding out their hand below a dollar sign.

Image source: Getty Images.

The Magic Kingdom is still sturdy

The biggest question mark hanging over Disney's future is how much it will be impacted by cord-cutting, skinny bundles, and over-the-top (OTT) streaming services, which are reshaping the landscape of the television industry. The company's cable and broadcast television businesses have been by far its biggest moneymakers in recent decades, but they're looking less dependable as profit centers in light of new service offerings and changing consumer tastes.

ESPN in particular probably accounts for between a fifth and a quarter of both annual sales and operating income, but rising content costs and falling subscriber numbers across TV land are hurting its profitability, even though Disney has been able to increase the fees that cable companies pay to carry its channels. Operating income for the media networks segment has dipped 6% year over year across the first nine months of the current fiscal year, despite sales increasing 3%. That's a real issue for the company, and one that has put some investors off the stock, but there are still avenues to healthy growth.

Disney's theme parks, film, and consumer products are generally performing well. Compared to the first nine months of fiscal 2017, operating income for the company's theme park segment is up 20%, and in the filmed entertainment unit, it's up 11%. The consumer products segment's operating income has slipped roughly 6% year to date, but that's likely attributable to a relative underperformance in just a couple of key properties (Star Wars merchandise in particular) rather than the start of a long-term trend. The good has more than outweighed the bad, as total operating income has improved by 4% year over year, earnings per share have increased 21%, and free cash flow is up 19%.

Content is king, and Disney is king of content

The House of Mouse is also launching its own OTT streaming service. Recently referred to as Disney Play, the company's bundle of non-sports film and television content is set to debut in 2019 and stands a good chance of being a long-term success. In a recent survey conducted by marketing research provider Morning Consult, 36% of U.S. millennials asked about Disney Play said that they would likely subscribe to it. Those results aren't proof that the platform will be a hit, but they also aren't shocking given the strength of the overall Disney brand and its vast catalog of entertainment content and properties. 

That unrivaled portfolio of entertainment assets will only become more impressive after Disney completes its $71.3 billion acquisition of Twenty-First Century Fox's properties. There's a case to be made that the company overpaid for Fox's franchises, studios, and television networks -- and the difference between its initial $52.4 billion bid and the deal's closing price supports that argument. However, there's also a difference between what these assets might be worth to any other company and the value that Disney can derive from them.

Disney already owned the world's most potent collection of entertainment franchises prior to the Fox deal. Now that the acquisition has been approved by the Justice Department and both companies' shareholders, that advantage is about to become even more dramatic. Disney should be able to leverage its muscle to continue dominating at the box office, driving traffic to its theme parks, and scoring merchandising wins. It also makes it much more likely that the company will secure a leadership role in the fast-growing streaming space.

Appealing earnings multiples and a growing dividend

As the chart below shows, Disney's current price-to-earnings ratio is well below its average of the last decade, and lower than it has been in almost seven years.

DIS PE Ratio (TTM) Chart

DIS PE Ratio (TTM) data by YCharts

The stock's valuation looks even more appealing in light of its fast-growing returned-income component. Disney currently pays an annualized dividend of $1.68, which yields roughly 1.5% at today's share price. That might not seem like much given the S&P 500 index average yield of 1.8% and current 10-year Treasury bonds' yield of roughly 2.9%, but the company has been rapidly boosting its dividend, and shareholders should anticipate more of the same.

Disney has nearly doubled its payout over the last five years, yet the payout still comes in at just 26% of annual trailing free cash flow. That's an appealingly low payout ratio, particularly in light of the fact that the company's FCF has climbed steadily over the last decade.

DIS Free Cash Flow (TTM) Chart

DIS Free Cash Flow (TTM) data by YCharts

Sporting a fast-growing dividend and backed by a sturdy business built on a foundation of great franchises and industry-leading creative teams, Disney stock looks like a worthwhile buy at current prices. It probably won't turn a five-figure investment into a million dollars anytime soon, but it can still be a big winner for your portfolio.

Keith Noonan owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool has a disclosure policy.