Why Disney Stock Is One of the Most Compelling Buys on the Market

While Disney (DIS 0.16%) may not be a screaming buy due to its theme parks' dependency on tourism and consumer spending, it still makes for a compelling buy for long-term investors. In this clip from "3 Minute Stocks Updates" on Motley Fool Live, recorded on May 25, Motley Fool contributor Toby Bordelon discusses Disney's recent quarterly report and the growth opportunity it still has ahead.

Toby Bordelon: Disney had, what I would call, a pretty good quarter. The story of this quarter is really theme parks coming back, people reserving the theme parks. I'm going to take you through a few charts they give us from their presentation and you can see there that 100% increase in parks and experience. Now, of course, you're looking at that comp from a year ago when they were still closed in many parts of the world, not at full capacity in the United States. It's a fairly easy comp and it's nice to see them starting to get back to where they were before that growth really returning there. The other story here, of course, is Disney Plus continuing to grow. You see when you dig into their media and entertainment division, the growth in direct consumer which is where Disney Plus lives is really solid, really seeing some nice growth there, still losing money. The operating loss continues to grow bigger, but they're still in high-growth stage. They're still trying to push this out to as many people as they can. Here's just a quick look at some more detail on their parks and experiences, you see growing both domestically and internationally. International, they're still not quite fully where they were before. Some of those international parks were closed for some of this quarter or not at their capacity. But, you're still seeing growth from a year ago. You're still seeing them returning to where we want them to be and in the final look here, so you can see their CapEx. As people return to those parks, they're continuing to reinvest in those parks, building out new experiences. The Star Wars hotel being a good example of that. That just opened up. But continuing to reinvest, continuing to grow that, continuing to give consumers a reason to come back to the parks, something maybe new and different than they hadn't seen before. Things are looking pretty good for Disney. I think one issue for them is, I think they're unfairly hit because Netflix (NFLX -9.09%) showed slower growth, but you look at Disney Plus, their subs were up 33%. They're almost at 140 million worldwide now. They're still growing. They haven't quite hit that threshold that Netflix has and you know Disney is not Netflix. Netflix doesn't have theme parks. Netflix doesn't have the actual distribution. Netflix doesn't have multiple monetization channels for their new and existing content. So it's a little bit different. I do like Disney here. Give them a look. They're recovering really nicely and, if they can keep that traffic, their theme parks back and growing, this is going to look pretty good in a couple of years, I think.

Brian Feroldi: This is a stock that is down more than 40% versus recent high. Disney Plus is on fire. Is this a screaming buy right now?

Bordelon: I wouldn't say it's a screaming buy just because it's a large company. They have a lot of CapEx requirements with those theme parks and for producing that content on Disney Plus and especially a company like this that is so dependent on tourism and consumer spending with the concerns about a recession, inflation fears, maybe that gives you a little bit of hesitation. But yeah, I do think it's a very compelling buy right now, Brian. Not a total no-brainer. But I think if you buy, odds are you're going to be pretty happy five years out.