My most recent post featured a list of companies that caught my attention lately. After some hesitation and discussion with my wife, I decided to go with the company which had the lowest dividend yield out of 4 companies in the watchlist – The Walt Disney Company (DIS).
Shortly about the company from Morningstar:
The Walt Disney Co owns the rights to some of the most globally recognized characters, from Mickey Mouse to Luke Skywalker. These characters and others are featured in several Disney theme parks around the world. Disney makes live-action and animated films under studios such as Pixar, Marvel, and Lucasfilm and also operates media networks including ESPN and several TV production studios. Disney recently reorganized into four segments with one new segment: direct-to-consumer and international. The new segment includes the two announced OTT offerings, ESPN+ and the Disney SVOD service. The plan also combines two segments, parks and resorts and consumer products, into one. The media networks group contains the U.S. cable channels and ABC. The studio segment holds the movie production assets.
Sector: Communication Services
Disney has a wide range of services in its portfolio. It brings some diversification to my portfolio, as I didn’t have any companies from the Entertainment industry yet.
As I mentioned in my previously posted watchlist, Disney had a nice run during last year, especially since April, when it announced its new video streaming service – Disney+. Since launching in November 2019, the streaming service already attracted ~25 million subscribers. According to Hollywood Reporter, it’s expected to hit 100 million by 2025. The fact that Disney+ app was downloaded 41 million times already says a thing. I think the service is especially attractive to families with kids, as it has so much family-friendly content.
On the 29th of January, I bought 8 shares of DIS for $136.55/share for a total of $1099 (including commissions).
This purchase adds $11.97 to my forward annual dividend income.
Fundamentals at the purchase price (as they stood on the 29th January):
- P/E ratio (TTM) – 21.89;
- Forward P/E (1 Yr.) – 26.18;
- Dividend Yield – 1.29%;
- Payout ratio – 25%;
- 10-year dividend growth streak;
- Net Debt/EBITDA – 2.58;
- Market Cap – $246.85B.
The dividend yield is very small, compared to my other holdings. However, I think it’s good to have some companies with lower initial yield but bigger growth potential. I am a dividend growth investor, not just dividend investor in the end 🙂
What do you think of Disney? Do you have it in your portfolio? Did it treat you well if you had it for a while? I would love to hear your thoughts!