Walt Disney Delivers In Time For The Holidays

 |  About: The Walt Disney Company (DIS)
by: InterTrader

Walt Disney (DIS) has approved a dividend per share of $0.86 - up $0.11 from 2012. This news comes as a welcome surprise to shareholders ahead of the festive season. Come January 16th, 2014, shareholders at Walt Disney will get a welcome treat.

Walt Disney continues to defy expectations. The 2012 annual reports presented investors with a rosy picture. At the time of writing, Walt Disney had achieved record income levels, earnings per share and revenues. The net income for shareholders was listed at $5.7 billion, a dramatic increase of 18% from 2011. Likewise, revenues were recorded at $42.3 billion, 3% higher than 2011. When diluted earnings per share were taken into account, they were reported at $3.13 - an increase of 24% from 2011. At the heart of Walt Disney's phenomenal success has been its acquisition of major media brands including the following companies: Lucasfilm, Marvel, Pixar, ABC and ESPN. This allows the company to continue to operate at the cutting edge, providing top-tier entertainment selections to people all over the world. Disney has made a habit of picking winners, nurturing them and enjoying strong profits from these companies. One notable acquisition was Marvel - a massive franchise that has turned into Disney's own superhero series of box office money spinners. The inclusion of Lucasfilm - the company responsible for the creation of the epic Star Wars series - brings an additional 17,000 memorable characters into the Disney family. The endless opportunities - creatively and financially - make this addition to Disney an absolute boon. During 2012, it was Disney's very own The Avengers (by Marvel) that shattered the box office records with a staggering $1.5 billion in revenues. This has subsequently been bolstered by major Marvel box office successes in the form of Iron Man 3, and more recently Thor: The Dark World. Combined those movies have already brought in $1.5 billion. The financial savvy that is so much a part of the Walt Disney enterprise continues to power ahead, shattering records and exceeding expectations at every perceivable opportunity. And with such tremendous diversified success comes a healthy stock price for Walt Disney.

The Performance of Walt Disney's Stock

The true picture of Walt Disney stock performance is best viewed over a prolonged timeframe. If we wind the clock back 5 years, it is clear that there has been a significant strengthening of Walt Disney stocks. Back on 7 December 2007 Disney stocks were trading at 32.79. Barely a year later, on 5 December 2008, the price dropped to 22.77. By 4 December 2009 Disney stocks had already gained the ascendancy and were trading at 30.84. Fast forward one-year to December 10, 2010 and the price was comfortably sitting at 36.66. By 9 December 2011 stocks were trading at 36.56. On 7 December 2012 a massive spike in Disney stock prices saw it trading at 49.24. By 4 December 2013 Disney stocks are pretty much at an all-time high, trading at 69.97. The dividend yield is listed as 0.75/1.07, the earnings per share is 3.38, number of shares is 1.76 billion and the market cap is $122.96 billion. The price-earnings ratio is 20.68. On the back of this exceptionally positive news for Walt Disney stockholders comes the latest report that the company has increased its annual cash dividend to shareholders by a staggering 15%. This is in tandem with the record-setting revenues generated by the company during the 2013financial year. An announcement was made in November 2013 by the Walt Disney board of directors that a dividend of $0.86 per share would be approved. This figure is up $0.11 from 2012. Year on year growth at the Walt Disney has been positive for three years running and shareholders are being rewarded accordingly. The chief executive officer of the Walt Disney - Robert Iger - was delighted with the interim results and decided to make good on his promise to reward shareholders. During the fourth quarter of 2013, Walt Disney recorded a 12% spike in profits on its revenue growth figures. The annual shareholder meeting for the company is slated to take place in Portland Oregon on 18 March 2014.

Put and Call Options on Walt Disney's Stock

There is no doubt that Walt Disney stocks are among the most watched and preferred stock options available to investors. As such, there are myriad investment possibilities when it comes to this particular stock. A popular favorite among investors is that of the put and call contract. A put option does not provide investors with upside potential as owning shares would, as the seller only owns shares when the contract is exercised. With put options, the expectation is negative for the future stock price of the company, so unless Walt Disney records a significant drop in its share price the investor may not collect. On the other side of the coin, investors have access to the call option which essentially expects the future price of the stock to be higher than the current market price. If this comes to pass, the investor is deemed in the money. In ascertaining which direct the stock is likely to move in, historical graphs and charts are used to anticipate potential future price movements. The current strike price at $65 may be evaluated against a future strike price of $72.50.

Much talk has been centered around the annualized dividend yield at Walt Disney. Generally, the profitability of the company and its dividend history are good barometers of gauging the likely movements in dividends. On the spectrum of bullish and bearish sentiment, Walt Disney stock is certainly in the bullish sector, given its strong performance of late. The 52-week low for the stock is at $48.55 and the 52 week high is $71.69. The massive dividend payout that Walt Disney has agreed to pay its shareholders amounts to a whopping $1.55 billion. During the course of 2013, Disney reported a net income of $6.1 billion, and EPS rose sharply to $3.13. Both of these figures recorded are up 8% from 2012. When revenues were calculated, they were also up in the region of 7% - $45 billion. Disney stock is also up almost 42% from the same period in 2012.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.