The Walt Disney Company (DIS)’s China Parks Facing Both Growth and Competition

Despite the fall in earnings, Disney’s adjusted EPS was $0.79 per share, $0.03 above analysts’ estimates. The company’s stock has risen by 10.3% in the last six months while Dreamworks Animation has not shown any growth in this period. In the meantime, the three leading consumer discretionary ETFs; Vanguard Consumer Discretionary ETF (NYSE: VCR), SPDR Consumer Discretionary ETF (NYSEMKT: XLY) and iShares S&P Global Consumer Discretionary Sector Index ETF (NYSEMKT: RXI), have all outperformed Disney slightly – see chart below – and throw off a comparable dividend. Disney is among the top ten holdings in each of three ETFs.

That said, however, The Walt Disney Company (NYSE:DIS) continues to make smart moves in its content creation business and de-emphasizing its content distribution business. It’s a company with a high cost of capital but also has seriously strong trophy assets, which are economic cycle-proof. As we approach a potential medium term pivot point in the broader equity markets I would wait to take a position to see what the market does.  Disney’s high beta gives me pause at this point in time. But, fundamentally I love the direction the company is headed.

The article Disney’s China Parks Facing Both Growth and Competition originally appeared on Fool.com and is written by Peter Pham.

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