- Walt Disney’s culture of learning fosters creativity in creating story content.
- Walt Disney brands are diverse and appeal to a wide array of audiences.
- Walt Disney stock sports rock solid fundamentals.
Entertainment conglomerate Walt Disney (NYSE:DIS) really knows a thing or two about succeeding in the 21st century. We live in an age of commoditization where differentiating between a hamburger at restaurant A and restaurant B represents a difficult task. One clothing retailer can look a great deal like another. Walt Disney understands the important correlation between unique branding and expanding wealth for its owners. Moreover, there are other interesting qualities of Walt Disney stock that appeal to the long-term investor.
Culture of Learning Adds Distinction
Basically, originality and distinction set Walt Disney apart. Walt Disney fosters a culture of learning, which compels Walt Disney’s employees to draw creativity from many sources including corporate history. For example, the creators of the film Zootopia looked at the process used in films such as Bambi. Walt Disney himself brought in live deer so that artists could study the movements and details of the animal.
Leaning on this inspiration, Zootopia creators observed animal behaviors at Disney’s Animal Kingdom Theme Park. The intriguing thing here is that the animal theme park provides creative inspiration as well as an entertainment, enriching the company’s investment appeal. The education efforts of Zootopia’s creative staff paid off for Walt Disney’s business and its shareholders. As of this writing, the movie brought in a whopping $697 million worldwide in gross box office receipts, according to Box Office Mojo.
Walt Disney utilizes smart strategies in its product and 'experience' offerings. For example, the company tries to incorporate local culture as exhibited in its Shanghai Disney Resort. As another example, Walt Disney displayed intelligent thinking by moving Star Wars Episode VIII from May 2017 to December 2017. This gives the company time for beefing up story quality. Moreover, this will allow Walt Disney to take advantage of any holiday based toy craze.
Resilient and diverse brands
Rated R “anti-hero” movie Deadpool represents a darker, grittier semi-protagonist that cares more about his whims and convenience than any code of conduct. This contrasts with Agent Carter or Captain America, who seem guided by a moral compass—most of the time. As of this writing, Deadpool raked in $746 million in global box office receipts on a mere budget of $58 million. This proves that the Marvel brand can appeal to various subsets of the sci-fi/fantasy genre. Walt Disney’s portfolio of brands includes Lucasfilm, which not only offers many compelling Star Wars characters with huge storytelling potential but sagas such as Indiana Jones and Willow as well.
Walt Disney has experienced excellent fundamental growth so far in FY 2016. In the most recent quarter, Walt Disney expanded its revenue, net income and free cash flow by 14%, 32% and 12%, respectively, YoY. Its balance sheet remains in solid shape, as Walt Disney’s cash and equivalents amounted to $4.3 billion equating to 9% of stockholder’s equity. Long-term debt amounts to a reasonable 27% of stockholder’s equity. Times interest earned comes in at an incredible 178 times interest expense when comparing total “segment operating income” to interest expense.
Walt Disney’s unique corporate culture, history and brand diversity should enable the company to compete effectively in the years ahead. These qualities will help set the company apart not only from the competition, but also from other companies in the entire publicly traded universe. Unique and compelling story potential is almost infinite. Finally, these attributes will likely filter to the bottom line translating into superior capital gains and dividend increases for Walt Disney Stock investors.