Is Disney’s Stock a Buy After Rising Dividends?

Pullbacks are a typical knee jerk reaction when acquisitions are announced. However, the stock remains in a long term rising trend. This temporary retracement may provide an opportunity to buy the shares at a convenient entry price.

A = A Level Management Runs the Company

Bob Iger has served as CEO since 2005. He is expected to remain in charge until at least 2016. Iger has been a dynamic and innovative leader, focusing on new technologies and high quality content.  He was responsible for the acquisition of Pixar in 2006, which was a foundational step in the renovation and modernization of Disney over the last years. Disney is a well-run company, delivering solid results with attractive growth opportunities in the middle term.

Conclusion

With acquisitions like Pixar, ESPN, Marvell and more recently Lucasfilms, Disney has incorporated some very valuable assets and consolidated its strategic position as an undisputed leader in the entertainment industry on a global scale. Financial performance has been strong as reflected by the growing dividend, and the company is well positioned to continue monetizing its brand and intellectual property through different venues over the following years.

Trading at a P/E ratio of 15.8, shares of Disney are reasonably valued. The recent pullback in the stock may present a buying opportunity in a fundamentally strong company. Disney should OUTPERFORM in the long term.

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