Whether it’s a part of your childhood dream or just a piece in a puzzle of your latest strategic investment plan, buying Disney stock is definitely worth considering.
The entertainment conglomerate currently owns over 33% of the whole US film industry. At the same time, stocks in Disney still come at an affordable price, making this investment seem like a legitimate choice.
But before reaching for your credit card, stay with us and learn how to buy Disney stock and whether this is the best choice for you.
- introduce you to The Walt Disney Company’s history and fundamental business information
- look into the stock performance outlook
- discuss your buying prospects
- go into detail about the different stock purchase options
About The Walt Disney Company
Walt and Roy Disney founded the Disney Brothers Cartoon Studio back in 1923. Although its originators were by far more interested in developing their product than gaining profit, the latter eventually became imminent.
Walt Disney’s famous saying was: “I don’t make movies to make money. I make money so I can make more movies.”
Still, one movie success after another and numerous planetary cinematographic hits later, Disney earnings kept continuously increasing. Some of the key milestones of its commercial expansion were:
- Snow White and the Seven Dwarfs: Released in 1937, the film was the first of a series of animated classics, which won millions of hearts worldwide.
- Mickey Mouse: The famous character along with Goofy and Pluto, could be seen on theater screens in the early thirties. However, in 1955 an hour-long show called Mikey Mouse Club aired on television. This marked the beginning of a new entertainment era.
- The Walt Disney World Resort: Opened in 1971, the theme park was an instant sensation. Needless to say, the total Disney worth has increased immensely ever since.
- Michael Eisner steps in: Eisner became the company’s new CEO in 1984. After taking the helm, he began more aggressively working on Disney’s empire expansion.
- The Little Mermaid: Released in 1989, the animation opened the door for the subsequent great blockbusters such as Beauty and The Beast, Aladdin, and The Lion King.
- Pixar, Marvel, ABC, ESPN, Lucasfilm, and Hulu partnerships: At the beginning of the 21st century, several industry giants joined the already impressive Disney network.
- Disney+: Launched in November 2019, the subscription video service further expanded the company’s influence on the streaming market.
The first Disney stocks were sold over the counter in 1949 for $3 each. The company started paying out common Disney stock dividends to its stockholders in 1956.
One year later, the company launched an Initial Public Offering (IPO) on the New York Stock Exchange (NYSE). The shares went public under the Disney ticker symbol DIS.
At the time, each stock was changing hands at $13.88. This means that investing $200 at that moment would get you 18 shares. However, Disney has had seven stock splits since its IPO. So, if you would’ve kept those initial 18 shares, they would eventually split into 6,912 whole shares.
In December 2020, DIS stocks reached the value of $173 per share. Thus, the investment from our example would make you a millionaire today. To be more precise, the 18 shares purchased during the IPO would’ve netted you $1.19 million.
And this is due to the stock’s more than 14% compound annual growth rate.
But will that trend continue?
Disney stock forecast
With over a hundred years of steady growth and billions of faithful fans, The Walt Disney Company represents much more than just an entertainment-oriented public company. We are talking here about all seven generations of the modern world largely influenced by Disney, starting with baby boomers.
And the influence continues to spread all around the globe, bringing along the American language, culture, and values. Thus, people often perceive the company as one of the major American national symbols. And, as such, it’s likely to persevere against the challenges of time.
The median estimate for the Disney share price is $213.00. This represents almost a 21% increase from the stock’s current value. The most bullish analysts expect the company to trade at as high as $230, while the lowest forecast is of $147.00.
And, is Disney stock a buy?
Overall, a majority of analysts agree that Disney is a buy. This recommendation has remained unchanged since the beginning of 2021.
But, what to take into consideration before you decide to invest in Disney?
What are some of the latest Disney performance indicators?
Let’s find out!
Should You Buy Disney Stock?
There are several things to consider before buying any individual stocks. You should start by:
- researching the overall performance of the company,
- comparing some of the latest financial data,
- and spotting the potential warning signs.
Disney stock performance
Here’s a quick Disney stock price history:
- Disney’s all-time highest closing share price was on March 08, 2021 — $201.91.
- The average Disney stock price for the 52 weeks ending May 18, 2021, was $151.88.
- The highest 52-week period performance figure was $203.02, achieved on March 8, 2021. That is 16.5% above the current stock price.
- The lowest 52-week period performance figure was recorded on June 26, 2020. The $108.02 median price is 38% below the current Disney share price.
In the meantime, the dividend yield was being paid out to the stockholders semi-annually since 2015. The average rate of dividend reached 1.5% before Disney suspended it due to the pandemic financial losses.
Even though the total Disney assets have doubled since 2017, the company’s revenue has been in decline since 2019. The biggest 12-month downturn was for the year ending March 2021 — 25.47%.
The slump came amid hard times for the global economy and stock market.
The COVID-19 pandemic led to the worldwide Disney amusement park closure. As a result, 32,000 employees lost their jobs. This, of course, affected the business. In May 2020, the company announced the refrain from the semi-annual dividend payments for the first part of the year.
On the other hand, Disney+ was off to a good start at the end of 2019. Over 10 million users subscribed the same day the streaming service got released. Moreover, the number of users surpassed 100,000 just 16 months after the launch. The increase was fueled by the strong demand for streaming services during the pandemic.
Beginning 2021, the Disney stock value recovered and doubled since the previous year. As a result, The Walt Disney Company remains among the S&P 500 top leaders.
Despite the company’s stable performance and stock resilience, most market experts would advise you against relying solely on Disney as an investment. But, of course, this greatly depends on your portfolio too.
Whether you’re looking for ways to diversify your portfolio or building one from scratch, there are a few things to keep in mind.
And so, before answering the main question:
How to buy Disney stock?
Let’s first see how that plan fits into your portfolio.
Investing in Disney, with its stable growth and fascinating history may seem a lucrative, yet safe, decision.
In fact, many people, including some celebrities, deem the Walt Disney stock a great first step toward building investing habits in their kids. And so gifting these to minors, instead of a toy or clothes, is becoming a sort of a trend.
On the other hand, you should know that diversification and strategic distribution of assets influence your success much more than any individual stock purchase. A well-diversified portfolio that generates profit typically includes 20 to 30 different companies and corporation stocks, including blue-chips.
So yes, you should add Disney shares to your portfolio, but only if this makes sense and complements your previous investments.
Also, how much do you really know about The Walt Disney Company?
Do you already possess other similar stocks from the industry?
Are you comfortable enough buying individual stocks, or should you consider investing in ETFs and mutual funds (which offer you more security and by default diversify your portfolio)?
These are all the questions that you should be able to answer before making a final decision.
How to Buy Disney Stock?
Once you decide to buy Disney shares, the only thing left is to decide on the exact purchasing method. Currently, there are three ways to become a Disney shareholder.
1. Direct purchase
Completing a Disney direct stock purchase is quite straightforward. Getting it as a present for your child, you can even acquire a Disney certificate with their name on it. It’s a nice bonus if you’re looking for a creative way to interest them in investing from an early age.
So, how to buy Disney stock directly?
The only way to complete your purchase directly is via The Walt Disney Company Investment Plan.
The minimal single investment amount is $200. You have the option of paying in full or in a maximum of four installments, $50 each.
The purchase fees are as it follows:
- $20 initial Disney stock set-up fee
- $7 check fee
- $0.02 per share processing fee
- $1 fee for one-time investment or recurring investments
Additionally, you will pay:
- $20 fee for batch sales
- $25 fee for market order sales
Bear in mind that this plan is available only to US residents living in the US or Canada.
And once you have an account, you can easily trade the stocks online or through the phone.
2. Investment through a brokerage account
Possibly, the best way to buy Disney stock is through a brokerage account. This way, you not only avoid most of the additional fees, but you can also place limit and stop-loss orders.
If you’re new to the world of stock trading, consider opting for one of the stockbrokers for beginners. They offer services and features tailored toward novice investors, as well as plenty of educational resources.
Once you choose the preferred trading platform, opening an online account shouldn’t take you more than 15 minutes. To speed up the process, have some of your basic information ready such as your Social Security Number, phone number, and email address.
After signing up, there are two main Disney investment options to choose from. You can:
- Place a market order — trade shares at the current price
- Set a limit order — which will ensure that shares are traded only at the price that you have specified ahead
You can complete both through online trades, broker-assisted trades, or phone trades.
Nowadays, there are numerous automated investment solutions available too. They work on a similar principle as regular brokerage companies, with one difference, they are completely automated. That means that your fees will probably be even lower.
3. With the help of a financial advisor
Some people prefer face-to-face communication with experienced financial advisors when purchasing Disney stock.
Trading markets are often quite unpredictable. Furthermore, the ongoing pandemic situation taught us that even shares with such a long tradition, like Disney’s, can suffer from unforeseen circumstances.
Having a reliable and knowledgeable person to guide you through the art of stock trading may cost slightly more. However, it offers a certain peace of mind when it comes to investment quandaries.
A more affordable online alternative to a financial advisor is using a stock screener tool. While the assistance you get is not so personal, these stock filters are vital for beginners.
So, is investing in Disney shares a smart choice?
All in all, Disney has proven to be a reliable investment option ever since its IPO over 50 years ago. As with every company of that size, minor setbacks have occurred throughout its history. The latest COVID-19 pandemic surely was one of those instances.
Still, thanks to its wide assortment of products in the entertainment field, the company managed to bounce back and fully recover.
Ultimately, whether you are buying Disney stock directly, through a brokerage firm, or with the help of an advisor, keep in mind the constant stock market volatility and the risks it poses. Try to diversify your portfolio and observe the changes in stock trade timely.
Disney is a publicly-traded company, and as such, it doesn’t have a single owner. The largest shareholder is Vanguard Group Inc., which holds 8% of the outstanding stock. The next in line of major investors are BlackRock Inc. and State Street Corp, with a 6.3% and 3.9% stake, respectively.
The estimated net worth of The Walt Disney Company is currently between $130 billion and $140 billion. However, it’s difficult to establish an exact figure due to the company’s constant trading activities.
As of May 27, 2021, a share of Disney stock costs $177,76.
As soon as you buy your first Disney stock, you’re eligible to get a Disney stock certificate for an additional $50.
There are three ways to buy Disney stock as a gift. You can buy them directly through The Walt Disney Company Investment Plan. Next, you can do your purchase through a brokerage account. Finally, you can hire a professional investment advisor.
The most convenient way to sell your stock in Disney is through a stockbroker. There are numerous online brokers through which you can easily sell your stock. Some of them are Charles Schwab, Merill Edge, and Fidelity Investments.
Ultimately, if you know how to buy Disney stock, you’d have no trouble selling your holdings, too.