Why The Walt Disney Company (DIS) Is an Attractive Investment

One of the few signs of trouble, albeit a slightly insignificant one, was a 7% drop in cash provided by operations (six months ended). This decrease was a result of higher cash payments at corporate, studio entertainment, parks and resorts and media networks. This is not that bad of a sign, though, because a lot of the increase in cash payments can be attributed to investments in the different operating segments, which totaled $1.119 billion.

Because of these strong fundamentals that the business operates with, success appears to be flowing in quite easily for Disney. At the current price, Disney’s stock looks very attractive. It is trading at 19.65 times trailing earnings, has a price/book  of 2.70, and a price/sales of 2.60. Surprisingly, this is an aspect in which Disney’s competitors seem to have an edge. News Corp (NASDAQ:NWS)has a 12.60 price to earnings ratio and Time Warner Inc (NYSE:TWX)’s is 17.63. I suppose, though, that with the kind of fame and optimism that has surrounded Disney for decades upon decades, it is not surprising to see that the stock has built up a slightly higher premium than that of its competitors. Regardless, the multiples of Disney are still quite attractive. On top of all this, Disney offers a $0.75 per share dividend.

The bottom line

Overall, Disney is driven by strong growth that is occurring at an efficient and safe level and backed by numerous statistics. If Disney continues to grow and prosper at the rate it historically has, the stock price is likely to continue to rise for years to come, as Disney grabs an even larger share of both the media and hotel markets.

Bryan Wagman has no position in any stocks mentioned. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney.

The article Why Disney Is an Attractive Investment originally appeared on Fool.com.

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