Walt Disney Co (NYSE:DIS) has grown its earnings-per-share at 14.0% a year over the last decade. Disney currently has a market cap near $200 billion, making it the 15th largest publicly traded United States based stock.
Despite its massive size, Disney’s growth days are far from over. This article examines the company’s current valuation and growth prospects for dividend growth investors.
Among the funds that the Insider Monkey follows as part of its small-cap strategy, 60 held shares of the Walt Disney Company at the end of June, amassing some 2.30% of the company’s outstanding stock. In the current round of 13F filings, billionaire Ken Fisher’s Fisher Asset Management disclosed ownership of 8.51 million shares of Walt Disney, held as of the end of September.
Company Overview
Disney operates in 5 segments. Each segment’s percentage of total operating income generated for Disney in fiscal 2015 is shown below:
– Media Networks earned 53% of operating income
– Parks & Resorts earned 21% of operating income
– Studio Entertainment earned 13% of operating income
– Consumer Products earned 12% of operating income
– Interactive earned 1% of operating income
Media Networks
The Media Networks segment is Disney’s largest, by far. It generated over half of the company’s operating income in fiscal 2015. Disney divides its Media Networks segment into 2 business units:
– Cable Networks
– Broadcasting
The Cable Networks business unit generated 87% of the Media Network’s operating income. The Broadcasting segment was responsible for the other 13%.
Disney’s cable networks include: ESPN (80% owned by Disney, ABC Family, Disney Channel, and A&E Television Network (50% owned by Disney). The A&E Television Network includes A&E, History Channel, and Lifetime.
Disney’s Broadcasting business unit owns the following:
– 8 domestic television stations
The 8 domestic television stations Disney owns are located in: New York, Los Angeles, Chicago, Houston, Philadelphia, San Francisco, Raleigh-Durham, and Fresno
Parks & Resorts
Disney’s Parks & Resorts segment is its 2nd largest, responsible for 21% of operating income in fiscal 2015. The segment owns and operates the following:
– Walt Disney World in Florida
– Disneyland in California
– Aulani in Hawaii
– The Disney Vacation Club
– The Disney Cruise Line
– Adventures by Disney
– Disneyland in Paris (51% ownership)
– Disneyland in Hong Kong (48% ownership)
– Disney Resort in Shanghai (43% ownership)
– Disney Resort in Tokyo (not owned, licenses operations)
Studio Entertainment, Consumer Products, & Interactive
These 3 segments combined accounted for 26% of Disney’s operating income in fiscal 2015. The Studio Entertainment segment distributes films under the Walt Disney, Pixar, Marvel, Touchstone, and Lucas Films names. Studio Entertainment is also home to Disney’s theatrical performances and the Disney Music Group.
The Consumer Products segment licenses the company’s well-known brands and characters (Marvel, Star Wars, Mickey Mouse, etc.) to publishers and retailers to create a wide variety of products.
The Interactive segment is Disney’s smallest by far – responsible for just 1% of operating income in 2015. The segment primarily creates and licenses games (for consoles, mobile phones, and the real world).
