Walt Disney vs Universal Which Outperforms?

Walt Disney and Universal are two major players in the entertainment industry, with both companies operating theme parks, movie studios, and various other media outlets. Investors often compare the performance of their stocks to determine which company offers the best investment opportunity. While Disney has historically outperformed Universal in terms of stock price growth and profitability, Universal has seen recent success with the popularity of its Harry Potter theme park attractions. This analysis will examine the strengths and weaknesses of both companies' stocks to determine which may be the better investment option.

Walt Disney or Universal?

When comparing Walt Disney and Universal, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Walt Disney and Universal.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Walt Disney has a dividend yield of 0.74%, while Universal has a dividend yield of 7.52%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Walt Disney reports a 5-year dividend growth of 0.00% year and a payout ratio of 11.49%. On the other hand, Universal reports a 5-year dividend growth of 4.11% year and a payout ratio of 64.59%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Walt Disney P/E ratio at 38.46 and Universal's P/E ratio at 10.94. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Walt Disney P/B ratio is 1.83 while Universal's P/B ratio is 0.94.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Walt Disney has seen a 5-year revenue growth of 0.23%, while Universal's is 0.29%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Walt Disney's ROE at 4.78% and Universal's ROE at 8.62%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $99.00 for Walt Disney and $53.38 for Universal. Over the past year, Walt Disney's prices ranged from $83.91 to $123.74, with a yearly change of 47.47%. Universal's prices fluctuated between $45.19 and $67.80, with a yearly change of 50.03%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.