Why to Invest in Disney Team 2

Background History Founded in October 1923 by Walt Disney and Roy Disney Established itself as a leader in the American animation industry before diversifying into live-action film production, television, and theme parks. Worth $74.9 billion as of 2015 Current CEO: Robert A. Iger

Current Financial Information Ticker Symbol: DIS - listed on the NYSE Industry: Broadcasting & Cable TV th Quarter Report Revenues for the year increased 7% to a record $52.5 billion. Net income for the year increased 12% to a record $8.4 billion. EPS for the year increased 15% to a record $4.90. Share Price: $114 EPS: 4.90 Market Cap: $194.8 B Beta: 0.9 Dividend Yield: 1.14% “In Fiscal 2015 we delivered the highest revenue, net income and adjusted EPS in the Company’s history.” - Robert A. Iger

Reasons to Invest Recent Acquisitions: Marvel Studios (2009) and LucasFilm (2013) MARVEL: Disney stock was $26 just before the company acquired Marvel; it is now over $100. Last year alone, Disney’s earnings climbed by more than 22% over the previous year, which is a huge increase for a company of Disney’s size. climbed by more than DISNEY: Analysts forecasting a $2 billion worldwide box office for “The Force Awakens,” of which $800 million to $1 billion should be captured by Disney. $2 billion worldwide box office

Reasons to Invest “Fiscal 2015 marked Disney's fifth straight year of record performance, and we are pleased to raise our dividend by 19% on an annualized basis.” -Robert A. Iger As of December 2, Disney raised their dividends for shareholders from $0.66/share to $0.76/share. Disney (DIS) ended fiscal year 2015 with a 7% gain in revenue from 2014 Of Disney's $52 billion in revenue, over 44% comes from Media Networks, by far its largest contributor. Parks and Resorts come in second at just over 30%, while studio entertainment operates a distant third at 14%. Diversification leaves ample room for profit.

Compare and Contrast

Apple Financial Information CEO: Tim Cook Ticker Symbol: APPL - listed on the NASDAQ Industry: Technology, Communications Equipment Summary Apple has larger market cap, and their higher EPS indicates higher profitability than Disney. However, Apple has a higher beta, indicating higher investment risk Share Price: $116 EPS: 9.22 Market Cap: $654.2 B Beta: 1.1 Dividend Yield: 1.77%

5 Year Market Share Changes Apple -lack of consistency -risky Disney -steadily increasing -safer to invest

Potential Apple Pitfalls Increased Competition Apple has real smartphone competition- smartphone market is saturated with other competitors-Samsung, HTC, LG, Windows Apple needs to attract 40 million to 50 million net new iPhones users a year, a difficult margin in a saturated market. The stock’s performance is highly correlated to iPhone sales and a slowdown in shipments would make it hard for the stock to work. Loss of Key Management Loss of Steve Jobs affecting company innovation and creativity Risk and Overvaluation Analysts warn Apple’s stock fall to the mid-$80’s if the risks play out. At the same time, even if risks melt away, the upside to the stock is $130 to $140. That’s not a good trade, the analysts say. “We believe its (Apple’s) earnings multiple, which is toward the upper end of its recent trading range, has limited upside whereas out-year estimates could be at risk.” - USA Today