With the Oscars having just wrapped up I can safely assume that many of you are feeling the movie spirit, and you probably want to check out some of the winners, head to the theater to see what else is out, or find a Redbox to pick something random up to watch. Well, the companies that make the movies you and I watch are, for the most part, publicly traded, and you could grab yourself a slice of the Hollywood pie with one simple investment.
Lions Gate Entertainment Corp. (USA) (NYSE:LGF) has been on a tear lately. The company has had some very successful movies out over the past couple of years, including the Twilight series and the Hunger Games movies, of which there are still more to come. The company’s has risen close to 130% over the last five years, and is right around the 50% mark this year alone.
Being that Lions Gate is in the movie business, it comes with some fluctuations in earnings. These companies have to spend money on acquiring the best IPs and then providing the IPs with reasonable budgets to pull off an excellent movie and still make a profit–it’s a tough business. Luckily, Lions Gate has been doing quite well, and while their earnings have jumped around, they’re still making money year after year.
The current P/E at Lions Gate is 74, a number that is obviously on the high side. Earnings are expected to be growing over the next few years though, especially as the company continues to mature their product line.
The Walt Disney Company (NYSE:DIS) is obviously a lot more diverse than Lions Gate. The company is involved in everything from movies to sports to theme parks, and is the definition of a diversified media conglomerate.
When it comes to movies, you’ll find Disney focusing on the family. The company owns Pixar, Marvel, and now Lucas Film. Those three companies combined create one of the biggest character stables in the entire world.
The Walt Disney Company (NYSE:DIS) won’t provide the types of returns that a company like Lions Gate can because they’re a lot bigger, and a lot more stable. They do, however, pay a dividend. It is currently a yearly dividend that yields 1.4%, which is nothing to scoff at.
Disney has a P/E ratio of 17.5, a low LT debt to equity ratio at 0.49, and an 18.9% pre-tax margin over the five-year average.