While Disney's (DIS -0.04%) share price has dropped over the past year, the company itself and its products remain as popular as ever. In this episode of "The Rank" on Motley Fool Live, recorded on April 11, Fool.com contributors Brian Withers, Matt Frankel, and Jason Hall discuss why shareholders shouldn't fret that the Disney magic will fade away anytime soon.
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Brian Withers: [laughs] Don't need really explain Disney to anybody. Anybody with kids or was a kid knows [laughs] what Disney is all about. This is the slide for the most recent earnings, and what you see is a company coming out of the coronavirus and the impact that it's had. You see, its park revenue is up triple-digits. But still down on the bottom, that park traffic is still below pre-pandemic levels. You can see that the stock is down over the past 12 months. But I think anybody who has Disney in their portfolio can rest easy to know that they're going to continue to turn out great content and figure out how to monetize that content, not only in movies, but short cartoons, to products, to their parks. They do an incredible job of taking one dollar of content-generation costs and turning it into three and five and 10 over decades.
Jason Hall: There's no doubt about that. I'm going to push back. I'm pretty sure this was Pixar. Disney bought Pixar in 2006 and it bought Marvel in 2009.
Withers: There was another question about what was the returns for this.
Hall: Marvel was a cash buyout and Pixar was --
Withers: Yes, if you go to the rec, that specific rec, there's a little "i" next to the thing that says updated to reflect corporate actions since the original recommendation of Marvel Entertainment LLC. The one from, that's a Marvel one. You have to look, Marvel. They actually made a couple of purchases of Marvel. The Pixar one was in 2003 I think what they bought and didn't return as much as the Marvel one did. I think part of it is they bought Marvel.
Hall: Only up 1,300%.
Withers: Yeah. [laughs] Part of the reason when they bought Marvel, it was coming out of bankruptcy and they had just released their first Spider-Man film. I remember reading the original recommendation, they're like, there's more to come here. Look out. Marvel has been reborn.
Matt Frankel: Disney bought Marvel for $4 billion, which I mean, two of their big franchise films can get close to making that for them.
Hall: I was going to say, I'm pretty sure they're at the point now where their Marvel movies every year generate that much revenue. [laughs]
Frankel: I've referred to Disney is the perfect combination of a pandemic play and just a reopening play. They couldn't have timed the launch of Disney+ better if they had known the pandemic was coming. It launched in October 2019, they reached their five-year goals, I think four years early. They're using that to leverage off-the-charts demand for their in-person activities. I can tell you firsthand as I'm a Disney World pass holder, we have annual passes, and the parks are sold out essentially for the rest of the month. That didn't used to happen unless it was a holiday. Demand for their in-person things are off the charts. They're now leveraging the streaming business. But I don't know if you guys saw this, they're giving 25% off at their parks, at their resort hotels down there, to Disney+ subscribers through the summer to get more people down there who haven't already been taking Disney vacations.
Hall: I need to go to Disney.
Frankel: You do.
Withers: That's the great power of their ecosystem.
Frankel: I mean, I feel like no company's ecosystem came out of the pandemic stronger than Disney compared to where it was before.
Withers: Yes, you ranked this No. 1.
Hall: Yes, Matt was No. 1, I was 5, and Brian, you were 6. For me, I'm a shareholder and I agree, Matt, in terms of I think about Disney almost like a butcher, and I want to be careful about describing that. [laughs] Because you say butcher and people assume all these bad things. What are butchers incredibly good at? Making something useful out of every single piece, everything, with minimal amount of waste. There is no company that is better at taking intellectual property and iterating it like Matt said, across its entire platform. It is a wonderful, wonderful business.
