The Walt Disney Company (DIS): Growth and Valuation

News Corp (NASDAQ:NWS) trades at 18.9 times TTM earnings, with the consensus projections calling for 16% annual earnings growth going forward. If the proposed split does occur (which I think it will), shareholders stand to benefit, as the company believes it will be less costly to run their businesses as separate entities.

Viacom, Inc. (NASDAQ:VIAB) operates the popular cable networks MTV, BET, and Nickelodeon, as well as the Paramount film studio. At under 16 times TTM earnings, it is the “cheapest” of these three companies. One thing that I view as a negative about Viacom, Inc. (NASDAQ:VIAB) is its dependence on a relatively narrow target demographic (young people) and their ever-changing trends and tastes. Regardless, Viacom is projected to grow at a 15% annual rate going forward, as the improved economy means more spending and hence, more advertising.

The bottom line

All of these three are very strong businesses that should have their best years ahead of them. The Walt Disney Company (NYSE:DIS) is actually my favorite of these three as a company, but I would like to see the shares pull back a little from the current levels before jumping in, something a little closer to the historic valuation level. So, start paying more attention to Disney if shares dip back into the $50’s, especially if there is a dip following this week’s earnings report.

The article Good Things Ahead for This Entertainment Giant originally appeared on Fool.com and is written by Matthew Frankel.

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