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The Walt Disney Company (NYSE: DIS) Sector-companies disney owns infographic

The Walt Disney Company (NYSE: DIS)
Sector: Consumer Discretionary
Target Price Current Price 52 Week High 52 Week Low P/E Market Cap. Dividend Yield Beta
$115.16 $91.41 $120.65 $86.25 15.73 $148.64B 1.55% 1.08
Business Description 5-Year Stock Performance
The Walt Disney Company is a diversified global entertainment
business with operations in five major segments: Media Networks,
Parks and Resorts, Studio Entertainment, Consumer Products, and
Interactive. Media Networks is Disney's largest segment which is
made up of the company's cable and broadcast television networks
which include ESPN, the Disney Channels, and ABC Family. The
segment generates revenues from affiliate and provider fees. The
Parks and Resorts segment consists of the domestic and international
theme parks and resorts the company owns or has effective
ownership in. The resorts generate the majority of revenue from the
sale of admission and the food and retail purchases made within the
parks. The Studio Entertainment segment produces live-action and Competitive Analysis
animated films, direct-to-video content, musical recordings, and live Disney competes with many different media conglomerates across its
theater performances. Disney distributes this media under the Walt various business lines. The company's largest competitors are
Disney Pictures, Pixar, Marvel, Lucasfilm, and Touchstone banners Comcast, Time Warner, 21st Century Fox, CBS Corp., and Discovery
with revenues stemming from the distribution of the content. The Communications. Disney has proven to be the market leader in the
Consumer Products segment designs and develops a wide array of media industry, with the largest market-share by revenue of all
products based on its extensive intellectual property which produce competitors. This past year, Disney reported $52.465B in revenue
revenue through licensing, publishing, and the company's retail stores. which is equivalent to 31.82% of the total revenue generated by its ten
The interactive segment develops console, mobile, and virtual games closest competitors combined.
sold globally and licenses content to publishers for mobile devices.
Industry Trends
Competitive Advantages
The entertainment media industry consists of companies that own
Disney is an innovator and leader in its primary business segments.
content and license intellectual property, as well as distribute media
ESPN, ABC, and the Disney Channels offer unique content that
through television and film. To remain competitive in this industry,
cannot be licensed or distributed by other media networks. The
companies must continually adapt to consumers' taste in both content
strength and exclusive nature of this content allows Disney to
and distribution. The industry has observed a shift over the past few
generate profit above their competitors through advertising and
years where consumers are switching from cable programming to over-
affiliate fees. The company also ties many of its business units
the-top (OTT) streaming services. To adjust for this change and the
together where consumers are able to engage with the same characters
loss of subscribers throughout the industry, companies have been
through television, film, consumer products, parks, and video games.
seeking innovative solutions to expand their distribution channels.
Disney's brand recognition is one of its strongest assets and continues
Companies that grow popular content, expand internationally, and
to be a household name across the globe.
innovate for future online trends are best positioned for long-term Risks
success. Disney faces a number of industry based risks. The primary concern
Investment Thesis
in Disney is its loss of subscribership for its ESPN networks with
The Walt Disney Company has been a leader in the media
consumers who no longer wish to pay the high cable fees and instead
entertainment industry throughout its history with its strong brand
are moving toward streaming services. However, Disney has made
recognition and consumer loyalty. The company will continue to
investments and partnerships with BAMTech, AT&T/DirecTV,
provide long run value due to its unique media network content,
Hulu, PlayStation Vue, and Sling TV which are actively addressing
domination in its world-renowned parks and resorts, and its
these concerns and moving the company toward streaming
consistent ability to monetize on its intellectual property. The
distribution. Other risks include decline in economic conditions,
company has seen consistent and strong growth since inception and is
maintenance of intellectual property rights, and increased competition.
continuing to innovate across all segments. Disney's minority stake in
As the top global content licensor with incredible control over its
BAMTech and other OTT streaming services will help the company
unique and innovative intellectual property, this risk is not a concern
expand distribution and thus remain an industry leader. International
and barriers to entry remain high in all segments.
investment in Europe and Asia for the parks and resorts business will Corporate Social Responsibility
benefit the company through exposure to other high growth Environmental Disclosure Score: 27.91 (Industry average: 16.83)
economies. Social Disclosure Score: 24.56 (Industry average: 19.14)
Percent of Women on Board: 30.00 % (Industry average: 20.57%)
Valuation Assumptions Key Financials Community Spending: 333.30M (Industry average: 151.89M)
WACC: 8.84% ROA: 10.23% (Industry 6.80%) Energy Efficiency and Climate Change Policies: Yes
Terminal FCF Growth Rate: 3.5% ROE: 19.70% (Industry 20.79%)
DCF Stock Price: $107.52 D/E: 35.69% (Industry 105.97%) Report Prepared By:
DDM Stock Price: $122.79 Net Margin: 16.80% (Industry Tom Delaney and Tami Stawicki on 10/12/2016
Weighted 50/50 13.77%) Sources: Bloomberg, Yahoo! Finance, Reuters, 2015 Disney Annual Report

What businesses does Disney own?when you own lucasfilm, as disney does, you also own: industrial light and magic, the award-winning visual effects division; skywalker sound for post-production sound design (winners of 18 academy awards), and lucasarts entertainment company, which created dozens of star wars and other games over the years, but was all but dissolved after the …


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