Feeling The Movie Frenzy? Invest in The Walt Disney Company (DIS), Dreamworks Animation Skg Inc (DWA)

DreamWorks

Dreamworks Animation Skg Inc (NASDAQ:DWA) is in the business of making animated movies. Titles such as Kung Fu Panda, Shrek, and Madagascar are the keep this company running and making money over the long term. DreamWorks is a little unique when compared to the other movie companies, though, in that they focus on animation. Animation has a much longer turnaround, and can cost much more than regular movies to make.

DreamWorks has a 20.7 P/E ratio, a figure that is outpacing the S&P 500 but is right in line for this company and its growth prospects going into the future. As animation gets easier and faster, the creative minds at Dreamworks Animation Skg Inc (NASDAQ:DWA) will keep the content flowing into the Cinemarks Holdings, Inc. (NYSE:CNK) and the AMCs, all while continuing to make heaps of cash.

The price to tangible book at DreamWorks is at 1.18, a pretty good pricing by my books, and the company is also carrying no debt.

So Should You Buy Them?

The movie business is definitely a turbulent one. No one knows for sure that people will actually turn up to see the movie, even if they have become pretty good at getting the numbers right. For that reason you’ll have to hang on to these studios over the long haul.

When it comes to Lions Gate and DreamWorks you would definitely want to make sure that you plan to hold these companies through thick and thin. Both of them, provided you do a little more due diligence, could be worthy of your long-term investment.

Disney falls into a different category that the other two in that its business is incredibly diverse. If you want exposure to the movie business then I don’t think that you could go wrong with Disney.

The article Feeling The Movie Frenzy? Invest in the Movie Makers originally appeared on Fool.com and is written by Ash Anderson.

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