While it is true that millions of investors believe in trading in stocks, it should be noted that there are certain stocks which are meant for holding term. If they are held over the long term, then such stocks have the capability of creating enormous wealth, and Walt Disney Co (NYSE:DIS) could well be such a stock.
It is one of the world’s most diversified media conglomerates, and since 2009, the stock has managed to generate gains of as much as 750%. Despite its size, the company has continued to evolve, and hence, it is important to take a closer look at Disney.
Streaming Service – Disney Plus
One of the biggest decisions taken by Disney in recent years is that of launching its streaming service Disney Plus. It was launched in November last year and is believed to be central to the company’s growth strategy for the future. Since its launch, it has generated $97.2 million in revenues already and garnered 41 million downloads of the app.
Experts believe that Disney Plus could garner as many as 100 million subscribers by 2025 and generate as much as $8 billion in additional revenues for the company. Disney has also gained control of Hulu following the acquisition of 20th Century Fox, and that service alone boasts of another 28 million subscribers.
The company has also spent a lot to gain subscribers in order to conquer the streaming space. It also means that the company will now be able to generate subscription revenues instead of a license fee for its considerable library of content. Disney’s total sales soared to $69.1 billion in 2019, from $55.1 billion in 2017, and analysts have projected sales of as much as $92.1 billion in 2022.
Additionally, the company has a dividend yield of 1.22%, and as of now, it has a payout ratio of 28%. Hence, there is room for a further rise in dividends in the long term. The company’s growth potential makes it a stock that could be held for the long term.
