Of the 30 stocks that make up the Dow Jones Industrial Average, The Walt Disney Company (DIS 0.20%) is my top one to buy now. The House of Mouse has seen its stock fall 38% off its highs from 2021. Meanwhile, its business is steadily improving from the devastations caused by the pandemic.
Consumers are unleashing pent-up demand to visit its theme parks. It recently surpassed Netflix to take the lead in total streaming subscribers. Despite these occurrences, it's down 38% off its high. Disney's stock could be due for a pop, making it an ideal time for investors to add it to their portfolios.
People are unleashing pent-up demand at Disney's theme parks
Of course, a pandemic is unsuitable for a business like Disney, which relies on bringing together large groups of people. It's no surprise that Disney's revenue fell by 6% in 2020. That said, folks are ready to get out of the house after more than a year of being cooped up at home. Evidence of that can be seen at Disney's domestic theme parks, where sales more than doubled to $5.4 billion in its quarter that ended on July 2. Investors welcomed the news from the lucrative business that generated an operating profit of $1.65 billion from the sales figure mentioned above.
Disney made several improvements to the theme parks business when it was forced to shut it down for several months. The company added mobile ordering at restaurants and contactless check-ins at its hotels; each has helped lower costs and made the experience more convenient. Additionally, Disney added a feature that allows guests at its theme parks to pay for the privilege of skipping lines at popular attractions. The effects of pent-up demand, new features, and higher prices led to rising per-capita spending at its theme parks in the third quarter, which was 40% higher than the comparable quarter in 2019.
Fortunately for investors, management sees this momentum continuing to the next quarter, as consumers show no signs of theme park fatigue.
Disney has a content advantage
That Disney's theme park business is booming may not be surprising as economies are reopening and folks are eager to get out of their homes. However, its thriving streaming segment is pleasantly surprising to Disney shareholders. The aforementioned was in high demand when consumers were locked up indoors while avoiding a potentially deadly virus before the release of vaccines. But Disney's streaming growth has remained robust even while others like Netflix have stagnated.
In its most-recent quarter, which ended on July 2, Disney reached 221 million streaming customers. The total was notable because it eclipsed Netflix's 220.67 million. Furthermore, Netflix shed 970,000 subs in its most-recent quarter, while Disney added more than 14 million. These results shed light on Disney's content superiority. Disney is home to Star Wars and Marvel, which allows The House of Mouse to make several movies and series with an established fan base. Additionally, it highlights the advantages of investing in a company with decades of experience making hit movies and shows.
With Disney so close to firing on all cylinders, investors would be wise to consider buying this beaten-down stock before it pops.