Here's How to Play Disney Stock Now

Say goodbye to Cinderella and Snow White. Thanks to superheroes and Jedi Knights, Walt Disney stock has never before reached such heights.

Officially, the shares touched an all-time high of $67.89 a share on May 16 -- not even two weeks after Iron Man 3 took the box office by storm. The film has since passed the billion-dollar mark in gross receipts worldwide, leaving fans clamoring to get Robert Downey Jr. back for a fourth go as the Armored Avenger. Mix in theme parks, ESPN, ABC, and a new Star Wars film with $2 billion potential and Disney starts to look like one of the great growth stocks of the next several years.

But investing is also a game best played in context. How does Disney stock compare to peers Time Warner and News Corp. ? Here's what the numbers say:

Key Statistics

Walt Disney

Time Warner

News Corp.

Current Share Price




Shares Outstanding

1.80 billion

932.2 million

2.32 billion

Market Cap

$116.1 billion

$54.0 billion

$72.5 billion

Trailing P/E Ratio




PEG Ratio




Gross Margin




Cash From Operations

$7.72 billion

$3.76 billion

$3.83 billion

Sources: S&P Capital IQ, Yahoo! Finance.

And here's what Fools say, going by the data available in our CAPS investor intelligence database:

CAPS Category

Walt Disney

Time Warner

News Corp.

CAPS Stars (out of 5)




No. of CAPS Ratings




Bullish CAPS Ratings




Bearish CAPS Ratings




Bull Ratio




Source: Motley Fool CAPS.

Disney, at five stars, is easily the top-rated stock of the bunch. The company's $40 billion licensing machine deserves at least some of the credit.

"Disney has always had the Midas touch when it comes to merchandising and with Star Wars and Marvel, the possibilities are endless," writes CAPS investor Scribblesink. "Look for Disney to bring in an amazing profit on their merchandising in the future. And let's not forget Pixar -- yes, Disney will outperform."

Fool pramathmalik adds that Disney has a "unique position" in the content business, and as a result, "huge monetization potential." I agree.

Verdict: Disney stock is a buy
Skeptics will note the huge run-up in Disney shares as a signal to hold off on buying. I'm not so sure. Yes, the stock trades for a premium at nearly 20 times earnings, but Star Wars is one of the top-earning film franchises of all time. And while Marvel has enjoyed two consecutive billion-dollar hits, remember we're still at the beginning of "phase 2" of the development of the Marvel Cinematic Universe. At least three phases are planned.

Will the House of Mouse's big-name entertainment properties provide enough cheese for investors? Let us know what you think of Disney's fantastical franchises, and whether you'd buy, sell, or short Disney stock at current prices, using the comments box below.

Mighty Mouse
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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Walt Disney and Time Warner at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool recommends and owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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