Disney Stock Analysis – Can Disney Stock go higher?

Today, we will cover a stock that grew up with most of us. If you watched any kind of cartoon as a child, then it’s very likely that you have seen some Disney cartoons before… namely Mickey Mouse for me. For plenty of traders and investors out there, Disney may not seem like a sexy stock but I do think it’s mistake not to have Disney in the watch list. So let’s go through our usual process in this Disney Stock Analysis to see if my hunch is right…

As always, my goals with this Disney Stock Analysis is to keep things simple and straightforward with no bias. Remember to leave a comment at the end of this analysis if you find it helpful…

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Disney Stock Analysis – Business Snapshot

Disney Stock Analysis Business Snapshot

Disney Stock Analysis Business Snapshot

With theme parks and mega cartoons out regularly, Disney continues to produce quality. Recently, they released Frozen and it was a mega hit among kids, boys and girls around the world. If you have not seen Disney movies or cartoons, go watch it… it’s really good. However, as investors, we will want to take a deeper look at Disney financials to see if we want to have a share in their success.


Disney Stock Analysis – Earnings Per Share

Disney Stock Analysis - 10 year Earnings Per Share History

Disney Stock Analysis – 10 year Earnings Per Share History

Disney’s 10 year EPS record is impressive. It’s what we want to see as business investor. It’s consistently growing and for a big company it’s really quite a surprise that EPS has tripled in the past 10 years form $1.64 in 2006 to $4.90 in 2015. And it’s probably still growing. In this aspect, Disney has passed with flying colors.


Disney Stock Analysis – Debt Equity Ratio

Disney Stock Analysis - Debt Equity Ratio

Disney Stock Analysis – Debt Equity Ratio

0.29 D/E ratio is just as impressive as the EPS growth. Low gearing companies are great! And Disney is one of them.


Disney Stock Analysis – Return on Equity

Disney Stock Analysis - 10 year Return on Equity Track Record

Disney Stock Analysis – 10 year Return on Equity Track Record

Pretty decent ROE % with the past 3 years averaging at 18%. Although I prefer to see ROE at 25% but then again, 18% is really above the curve.


Disney Stock Analysis – Operating Cash Flow

Disney Stock Analysis - Operating Cash Flow

Disney Stock Analysis – Operating Cash Flow

Good EPS growth with low D/E ratio and now looking into Disney Operating Cash Flow confirms that this is a solid stock and we certainly want Disney to be in our watch list. The next step is to determine the right price for Disney.


Should You Buy Disney Stocks?

With more and more cartoon blockbusters coming from Disney, there’s good reason to stay optimistic about Disney potential. Well… it’s already a solid company and we can expect it to continue to be solid when we take a look at their numbers. So let’s go to the fair valuation price for Disney now…

Disney Stock Analysis - Should You Buy Disney Stocks?

Should You Buy Disney Stocks?

At the point of this writing, Disney is trading at $104 which is way higher than what we are willing to pay for it. Of course, our valuation might seem too low if you are already in Disney stocks but we prefer to get involved with companies that are on fire sale and Disney (although very solid business) is not on sale. Remember, the lower the price we can invest, the lower the risk. We prefer to stay on the side for this for now. You should too!

Decide well and Good luck! Also, please leave a comment below as I love to hear from you.

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