Can The Walt Disney Company (DIS) Stay Hot?

Theme parks are Disney’s key point of leverage
The content Iger has amassed in the last few years would be far less valuable if it weren’t for Disney’s parks and resorts. Pixar, Star Wars, and Marvel movies will drive the next phase of developments at resorts and the characters have begun roaming the ground with Mickey and Minnie Mouse.

What most people don’t know is that parks and resorts are Disney’s second-biggest business and its fastest-growing segment. Revenue was up 14% in the first quarter to $3.3 billion and operating income jumped 73% to $383 million.

There are two big drivers of growth from a macro perspective and they are a growing middle class in Asia and disposable income for high earners in the U.S. Growing attendance at Hong Kong Disneyland Resort was cited as a driver of growth last quarter and that will continue as the Asian market is saturated with all things Disney. But it was actually domestic operations that drove growth in the first quarter and that’s because those with disposable income are traveling again and visiting Disney’s resorts.

Disney stock is ready for the future
It’s hard to argue that Disney stock is cheap at 20 times earning, but sometimes you have to pay up for a great company. The media business will go through a lot of changes over the next decade. I think, however, that Disney is well positioned for that with the best assets in media from the box office to the small screen.

The article Can Disney Stock Stay Hot? originally appeared on Fool.com.

Travis Hoium is short shares of Amazon.com. The Motley Fool recommends and owns shares of Amazon.com, Netflix, and Walt Disney (NYSE:DIS).

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