By Mark Harris
The Walt Disney Company (NYSE: DIS), being a global entertainment company that runs a wide range of businesses, is not a hidden gem in the stock market. Founded by the Disney Brothers Cartoon Studio in 1923, Disney has grown into a multi-billion dollar international company. Popularly known for its broadcast TV networks, theme parks, and streaming services, it shouldn’t come as a surprise that Disney is on the radar of most stock investors.
As a smart investor planning on buying Disney stock, it is essential that you look past its omnipresence in the entertainment industry. Just because it is popular that doesn’t mean you should blindly invest in Disney stock. Similar to other stocks in the market, before venturing into Disney, one should analyze the company thoroughly. And this article is going to help you with that.
Let’s start with the key things you should know about the Disney brand.
It’s at the top of its game
Did you know that in 2020, Disney generated a revenue of $16 billion from its 12 theme parks? This amount is exclusive of the revenue they generated from other products. Even though it decreased from the previous year, none of its competitors could even dream of catching up to it. The likes of SeaWorld and Comcast theme parks only got a tiny fraction of Disney’s revenue in 2020.
And we are not just talking about theme parks only. Disney also ranked at the top in nearly all categories that the brand offers. For instance, Disney+ was closely behind Netflix (NASDAQ: NFLX), with 100 million paid subscribers since it became available in 2019.
Though successful, Disney stock is vulnerable to volatility
The key difference between entertainment and essential companies is that the latter are more resilient. The pandemic is enough proof that Disney stock can be very volatile when faced with challenges. When compared to brands such as Amazon, Disney was pretty much shaken by the pandemic.
The good news is that Disney has the instruments that they need to recover from these challenges. With films lined up to be launched in the coming months and the success witnessed with Disney+, this brand will definitely bounce back. With that being said, for anyone looking to buy Disney stock, you must expect volatility in the coming days.
What’s Next for the Disney Stock?
Early June, Fintech Zoom posted an article speculating that the Disney stock could jump by another 15%. By the time of this post, a share of Disney was going for $176. We did see an increase to $183 in mid-July. And even though this isn’t the expected increase, there was a significant rise.
Understandably, last year the Disney stock dropped drastically. This was accelerated by the lockdowns that led to the closure of theme parks amongst Disney’s main sources of revenue. Other services provided by Disney were also affected both directly and indirectly by the pandemic.
Now that the world starts to recover from the pandemic, we can anticipate that the stock will go up again. Over the years, Disney stock climbed higher and higher. Take it from Thelma Howard, who was Walt Disney‘s housekeeper. This is one of the best Disney fun facts you will ever hear – on every birthday and Christmas, Walt gave her a stock. Through the years, it was worth 9 million dollars.
Fortunately, the ongoing vaccine rollouts are a good sign that the lockdowns will be lifted real soon. Several countries have already made this bold move, and hopefully, theme parks will be opened, and demand for theatrical releases will increase. Investors of Disney shares are likely to notice a huge growth in the next couple of months. And the numbers are likely to grow higher in 2022.
Useful Tips to Follow When Investing in Disney Stock
Does the future of Disney stock look promising? As you invest, make use of the following tips;
- I can’t emphasize enough the importance of company analysis. You may know all the Disney characters, but when it comes to investing in their stocks, these guys will not be of much help. Look into the company and how they operate. Zero in on their competition so that you can get a better understanding of how they generate revenue.
- Determine how Disney stocks fit into your portfolio. At the end of the day, a smart investor has a diversified portfolio. Investing in various industries is crucial as it reduces risk. Ensure that Disney stocks are in line and can fit into your portfolio.
- Evaluate how much you can afford to invest. The number one rule of stock investment is that you never put all your money in one basket. Calculate how much money you are willing to buy Disney stock and divide that by the current share price to know how many shares you will have. Depending on how the market behaves, you can invest more in Disney stock in the future.
Walt Disney Company (The) (NYSE:DIS), Netflix, Inc. (NASDAQ:NFLX) – Is Disney stock a good investment Even Today? Read This Disney stock Review And Decide By Yourself.
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