Why It's Good That Disney Is Giving Away a Fortune
If good corporate citizens make for better investments, then it's time to give The Walt Disney Company a closer look. Last week, the House of Mouse unveiled "Star Wars: Force for Change," a cooperative effort with UNICEF Innovation Labs and Programs to fund creative solutions to the world's biggest problems. Star Wars: Episode VII director J.J. Abrams introduced the idea in a video:
Whether you're a fan or a Disney investor (or both!), there's much to like about the campaign. For fans, the idea of winning a VIP trip to London to appear in Episode VIIhas to be thrilling. For investors, it must be gratifying to see Disney using its newer brands to do more good in the world. Good citizenship is usually good for shareholders.
According to research conducted by the Kellogg School of Management at Northwestern University, companies whose spending on corporate and social responsibility (CSR) programs exceeds investor expectations tend to enjoy positive stock returns. Think of Whole Foods Market and its commitment to conscious capitalism. Or how about salesforce.com , which provides free software and services to more than 22,000 non-profits and educational institutions? Both companies have given generously while producing market-thumping returns for shareholders.
Disney, too, has benefited. According to the company's 2013 Citizenship Performance Summary, total giving rose 26.5% to $369.5 million last year. Cash giving increased 40.2% to $79.2 million. Disney stock ended 2013 up 55.4% vs. 31.8% for the S&P 500.
"Star Wars: Force for Change" suggests that we can expect Disney to spend even more in 2014. Does that please you as an investor? Or would you rather see Disney divert its capital to other efforts? Please leave your take in the comments section below, including whether you would buy, sell, or short Disney stock at current prices.
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The article Why It's Good That Disney Is Giving Away a Fortune originally appeared on Fool.com.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 salesforce.com and Walt Disney 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.John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. The Motley Fool recommends salesforce.com, Walt Disney, and Whole Foods Market and owns shares of Walt Disney and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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