Say goodbye to Cinderella and Snow White. Thanks to superheroes and Jedi Knights, Walt Disney (DIS +2.30%) stock has never before reached such heights.
Officially, the shares touched an all-time high of $67.89 a share on May 16 -- not even two weeks after Iron Man 3 took the box office by storm. The film has since passed the billion-dollar mark in gross receipts worldwide, leaving fans clamoring to get Robert Downey Jr. back for a fourth go as the Armored Avenger. Mix in theme parks, ESPN, ABC, and a new Star Wars film with $2 billion potential and Disney starts to look like one of the great growth stocks of the next several years.
But investing is also a game best played in context. How does Disney stock compare to peers Time Warner (TWX +0.00%) and News Corp. (NWSA +0.00%)? Here's what the numbers say:
| Key Statistics | Walt Disney | Time Warner | News Corp. |
|---|---|---|---|
| Current Share Price |
$65.06 |
$58.72 |
$31.87 |
|
Shares Outstanding |
1.80 billion |
932.2 million |
2.32 billion |
|
Market Cap |
$116.1 billion |
$54.0 billion |
$72.5 billion |
|
Trailing P/E Ratio |
19.76 |
18.05 |
12.75 |
|
PEG Ratio |
1.49 |
1.26 |
1.25 |
|
Gross Margin |
21.2% |
45.6% |
37.8% |
|
Cash From Operations |
$7.72 billion |
$3.76 billion |
$3.83 billion |
Sources: S&P Capital IQ, Yahoo! Finance.
And here's what Fools say, going by the data available in our CAPS investor intelligence database:
| CAPS Category | Walt Disney | Time Warner | News Corp. |
|---|---|---|---|
|
CAPS Stars (out of 5) |
***** |
** |
** |
|
No. of CAPS Ratings |
5,869 |
1,259 |
155 |
|
Bullish CAPS Ratings |
5,520 |
1,068 |
126 |
|
Bearish CAPS Ratings |
349 |
191 |
29 |
|
Bull Ratio |
94.1% |
84.8% |
81.3% |
Source: Motley Fool CAPS.
Disney, at five stars, is easily the top-rated stock of the bunch. The company's $40 billion licensing machine deserves at least some of the credit.
"Disney has always had the Midas touch when it comes to merchandising and with Star Wars and Marvel, the possibilities are endless," writes CAPS investor Scribblesink. "Look for Disney to bring in an amazing profit on their merchandising in the future. And let's not forget Pixar -- yes, Disney will outperform."
Fool pramathmalik adds that Disney has a "unique position" in the content business, and as a result, "huge monetization potential." I agree.
Verdict: Disney stock is a buy
Skeptics will note the huge run-up in Disney shares as a signal to hold off on buying. I'm not so sure. Yes, the stock trades for a premium at nearly 20 times earnings, but Star Wars is one of the top-earning film franchises of all time. And while Marvel has enjoyed two consecutive billion-dollar hits, remember we're still at the beginning of "phase 2" of the development of the Marvel Cinematic Universe. At least three phases are planned.
Will the House of Mouse's big-name entertainment properties provide enough cheese for investors? Let us know what you think of Disney's fantastical franchises, and whether you'd buy, sell, or short Disney stock at current prices, using the comments box below.
