With global markets being roiled by Russia's ongoing war in Ukraine and high inflation rates stubbornly holding on, many economic experts have voiced concern about the likelihood of a U.S. recession. For investors considering how best to prepare themselves, it makes sense to consider which competing stocks to hold and which to shed in a downturn.

With this in mind, here's why it makes sense to buy Walt Disney (DIS 0.18%) and sell Netflix (NFLX -3.92%) right now.

One stock has underperformed, the other is doing even worse

At the time of this writing, Walt Disney is hovering around $97 per share, far below its $157 price at the start of 2022. Indeed, at the beginning of the year, Walt Disney was outperforming the S&P 500 by a few points. And while both have steadily dropped over the course of the year, Walt Disney's drop of almost 38% has outpaced the S&P 500's dip of roughly 24%.

Netflix's share price has had a much more dramatic drop over 2022. From a price of approximately $597 at the beginning of January to a touch over $240 in recent days, Netflix's 60% drop is perhaps representative of a streaming company that has been shedding customers this year. That's not to say it hasn't embraced plans to reverse those losses, but rather those moves are yet to fully materialize.

Netflix's ad-based plan is still vague

Both Walt Disney and Netflix have outlined plans for ad-supported streaming tiers. Walt Disney will introduce a new $7.99 per month Disney+ offering in December 2022, featuring approximately four minutes of ads for each hour of content. The offering will supplant its current Basic tier, which will increase in price from $7.99 to $10.99 per month.

Netflix is yet to disclose the release date or price for its ad-based plan, but sourced reports indicate it could arrive in November 2022, priced between $7 and $9 per month. If the range is correct, it would present a lower price of entry for the streaming service, which currently starts at $9.99 per month. However, Netflix has said "no decisions have been made."

A recent U.S.-based survey of Netflix customers by Reviews.org found 25% said they plan to cancel their subscriptions this year, with 40% of respondents citing the cost of the service as problematic. So unless the company introduces a new lower-cost tier, it still risks losing customers. For investors, Netflix's opacity may sow uncertainty, particularly with the possibility of even more challenging economic times ahead.

Walt Disney has more well-established franchises

The Reviews.org survey also highlighted another issue for Netflix: A third of respondents felt the streamer doesn't carry enough shows they want to watch. The study didn't provide further insight into what viewers were looking for, but Fandom's State of Streaming report from April 2022 shows franchises are particularly important to consumers when considering which streaming services they want to pay for.

Walt Disney's streaming service Disney+ is the central repository for both Marvel and Star Wars TV shows and movies. From She-Hulk: Attorney at Law and the Avengers to Obi-Wan Kenobi and Rogue One: A Star Wars Story, Disney+ has a slew of properties that are part of broader franchise tapestries. For dedicated fans who want to stay abreast of such ever-expanding worlds, maintaining a subscription to Disney+ is a no-brainer.

While Netflix has nothing as expansive as Marvel or Star Wars, it has dabbled in world-building projects of its own. From its Sandman adaptation to its The Witcher series, the company certainly seems to understand that franchises are a key part of maintaining committed subscribers.

Disney has alternative income streams

As mentioned, Netflix is implementing plans to boost subscriber growth and thus improve revenue returns from its customers. One of these approaches has been to invest in video games, making many titles exclusively available to its subscribers. However, that strategy is still at a nascent stage and hasn't yet driven serious growth for Netflix.

By contrast, Walt Disney is a much more diversified company than Netflix, with many decades of experience running ancillary businesses that pull from its vast bank of intellectual property. Fans can visit Disneyland, where they will likely run into characters such as Mickey Mouse and Donald Duck, or they can visit a Disney Store to purchase a Toy Story lunchbox or a Lion King plushie.

For investors, Walt Disney's strengths only highlight Netflix's weaknesses. And at a time when economic struggles seem to be on the horizon, Walt Disney's stock sure seems to be the better long-term bet.