The Trouble With ESPN
If you were looking to invest in a brand that catered to men, ESPN would be the perfect choice. The channel has an industry leading position in sports. That’s the main reason it’s such an important part of the The Walt Disney Company (NYSE:DIS) portfolio. That’s right, cute and cuddly Mickey Mouse muddies up owning shares in the “man sport” channel.
Of course that family focus makes The Walt Disney Company (NYSE:DIS) a ton of money, putting it at the forefront of the content market. So there’s a reason why the top-line has grown in nine out of the past ten years, with earnings going from about a $1.10 in 2004 to over $3.10 last year. The dividend has been increased regularly, too. The Walt Disney Company (NYSE:DIS) is a great company and has only gotten better with its recent acquisitions of Marvel and Lucasfilm. Both of those broaden its appeal to men, by the way.
A price to earnings ratio around 20 is high but reasonable, and the yield of around 1.2% isn’t enough to attract income seekers. So, growth minded investors looking to buy a diversified media giant with a notable focus on attracting men should like Disney. But, if you don’t want to muddy up your “man” stocks with family fare try these two:
Smack Down!
World Wrestling Entertainment, Inc. (NYSE:WWE) is the wrestling company and it’s a pretty pure play on entertainment geared specifically to men. However, it’s better to think of World Wrestling Entertainment, Inc. (NYSE:WWE) as a media company. Although just about all of its properties are directly tied to its wresting league, its portfolio includes live entertainment, television shows, web sites, video games, and movies. That’s an important reframing of the brand.
On the plus side, World Wrestling Entertainment, Inc. (NYSE:WWE) has no debt and a material amount of insider ownership. Moreover, it pays a large dividend, with the yield recently at around 4.4%. That said, despite its broad portfolio of offerings, it’s basically a one-trick pony. And wrestling has a habit of going in and out of favor. In fact, the company’s top-line has been fairly stagnant since 2009.
Earnings haven’t fared much better, falling from $0.68 a share in 2009 to $0.42 last year. The dividend, meanwhile, isn’t what it used to be either. It hit a high of $1.44 a share annually coming out of the 2007 to 2009 recession, but quickly fell off as results stagnated. The dividend is now just $0.48 a share a year. Earnings don’t cover the payout. Another negative is the PE, which is high at over 40.
For dedicated World Wrestling Entertainment, Inc. (NYSE:WWE) fans, however, none of that may matter. For investors, though, this is a turnaround play. If interest in wresting picks up, results will improve and these shares will move higher.
