Post by The Big Daddy C-Master on Aug 15, 2016 15:27:38 GMT -5
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Consumers are likely to have more discretionary income in 2016, thanks to record-low interest rates, low gas prices and an improving labor market. Higher levels of discretionary income bode well for the entertainment industry, as people have more money to spend on activities they enjoy.
The following five entertainment stocks are established players in the entertainment industry and are likely to continue providing consumers with their favorite movies, television shows and casino resorts in 2016 and beyond.
Walt Disney
Walt Disney Co. (DIS), founded in 1923, is an entertainment company that operates media networks, studio entertainment, theme parks and resorts, consumer products and interactive media. Its film studios include Pixar, Marvel and LucasFilm. Disney has a knack for taking box-office hit films it produced, such as Star Wars, and creating shows, rides and other attractions at its theme parks. Content is distributed through its cable networks, providing additional scale. Given that Disney releases new films on a regular basis, the brand is kept energized and fresh. As of July 26, 2016, Disney had solid three-year average revenue growth of 7.5%, substantially outperforming the 2.1% industry average. Strong revenue growth allows Disney to keep producing quality content that is often expensive to produce. It has an attractively low debt-to-equity (D/E) ratio of 0.3. DIS has returned -7.31% year-to-date (YTD) in 2016 and pays a dividend yield of 1.47%. Its market capitalization is $156.9 billion.
Netflix
Netflix Inc. (NFLX) provides consumers with television shows and movies through an internet subscription service. In the first quarter of 2016, it had roughly 46 million U.S. subscribers, which is approximately half of the U.S. cable market. Globally, it has 77 million subscribers. Several of its hit shows that have viewers compelled to subscribe are "House of Cards," "Orange is the New Black" and "Jessica Jones." Netflix had a market cap of $39.2 billion as of July 26, 2016. It has strong three-year revenue growth of 23.4%, which is substantially better than the pay-television industry average of 7.7%. Netflix is using less debt than its competitors, with a D/E ratio of 1, compared to the industry average of 2. NFLX is trading at $91.41, toward the low end of its 52-week range of $79.95 to $133.27, providing investors with an opportunity to acquire the stock at lower prices. It has returned -20.8% YTD in 2016.
Comcast Corporation
Comcast Corp. (CMCSA) provides media and television services. It owns various cable channels and major broadcast network NBC. Comcast is the largest cable and internet service provider in the United States. Its recent purchase of DreamWorks Animation broadens the corporation's product offerings with rights to "Shrek" and "Kung Fu Panda." Comcast is cheaper than many of its peers, with a trailing 12-month (TTM) price-earnings (P/E) ratio of 20.4; the industry average is 33.9. Earnings for the second quarter of 2016 came in better than expected, with earnings per share (EPS) of 83 cents, beating street estimates by 2 cents. Revenue also surprised to the upside: $19.3 billion versus forecasts of $19 billion. Comcast has performed strongly YTD, providing investors with a return of 20.47%.
Las Vegas Sands Corporation
Las Vegas Sand Corporation (LVS) owns and operates casino resorts and convention centers. About 49% of the company’s profits come from its Macau operations. Although casinos in this region have struggled as China’s economy has cooled, the rise of the Chinese middle class is likely to benefit the stock in the long term. Las Vegas Sands has an enticing dividend yield of 5.41%, trumping the Standard & Poor’s (S&P) 500 average of 2.7%. Performance has been strong in 2016, with a YTD return of 18.75%. LVS has a market cap of $40.2 billion.
Time Warner
Time Warner Inc. (TWX) is a media and entertainment company that operates through three segments: networks, film and television entertainment and publishing. It reported encouraging earnings in the first quarter of 2016 as a result of rising subscriptions in its Turner Broadcasting unit and popular cable channel, Home Box Office (HBO), home to fantasy drama television series "Game of Thrones." As of July 26, 2016, Time Warner had provided investors with an impressive YTD return of 22.27%, strongly outperforming the diversified media industry average return of 1.79%. TWX has a market cap of $61.6 billion and 1.92% dividend yield. Its P/E ratio of 15.8 makes it cheaper than many of its competitors.
Consumers are likely to have more discretionary income in 2016, thanks to record-low interest rates, low gas prices and an improving labor market. Higher levels of discretionary income bode well for the entertainment industry, as people have more money to spend on activities they enjoy.
The following five entertainment stocks are established players in the entertainment industry and are likely to continue providing consumers with their favorite movies, television shows and casino resorts in 2016 and beyond.
Walt Disney
Walt Disney Co. (DIS), founded in 1923, is an entertainment company that operates media networks, studio entertainment, theme parks and resorts, consumer products and interactive media. Its film studios include Pixar, Marvel and LucasFilm. Disney has a knack for taking box-office hit films it produced, such as Star Wars, and creating shows, rides and other attractions at its theme parks. Content is distributed through its cable networks, providing additional scale. Given that Disney releases new films on a regular basis, the brand is kept energized and fresh. As of July 26, 2016, Disney had solid three-year average revenue growth of 7.5%, substantially outperforming the 2.1% industry average. Strong revenue growth allows Disney to keep producing quality content that is often expensive to produce. It has an attractively low debt-to-equity (D/E) ratio of 0.3. DIS has returned -7.31% year-to-date (YTD) in 2016 and pays a dividend yield of 1.47%. Its market capitalization is $156.9 billion.
Netflix
Netflix Inc. (NFLX) provides consumers with television shows and movies through an internet subscription service. In the first quarter of 2016, it had roughly 46 million U.S. subscribers, which is approximately half of the U.S. cable market. Globally, it has 77 million subscribers. Several of its hit shows that have viewers compelled to subscribe are "House of Cards," "Orange is the New Black" and "Jessica Jones." Netflix had a market cap of $39.2 billion as of July 26, 2016. It has strong three-year revenue growth of 23.4%, which is substantially better than the pay-television industry average of 7.7%. Netflix is using less debt than its competitors, with a D/E ratio of 1, compared to the industry average of 2. NFLX is trading at $91.41, toward the low end of its 52-week range of $79.95 to $133.27, providing investors with an opportunity to acquire the stock at lower prices. It has returned -20.8% YTD in 2016.
Comcast Corporation
Comcast Corp. (CMCSA) provides media and television services. It owns various cable channels and major broadcast network NBC. Comcast is the largest cable and internet service provider in the United States. Its recent purchase of DreamWorks Animation broadens the corporation's product offerings with rights to "Shrek" and "Kung Fu Panda." Comcast is cheaper than many of its peers, with a trailing 12-month (TTM) price-earnings (P/E) ratio of 20.4; the industry average is 33.9. Earnings for the second quarter of 2016 came in better than expected, with earnings per share (EPS) of 83 cents, beating street estimates by 2 cents. Revenue also surprised to the upside: $19.3 billion versus forecasts of $19 billion. Comcast has performed strongly YTD, providing investors with a return of 20.47%.
Las Vegas Sands Corporation
Las Vegas Sand Corporation (LVS) owns and operates casino resorts and convention centers. About 49% of the company’s profits come from its Macau operations. Although casinos in this region have struggled as China’s economy has cooled, the rise of the Chinese middle class is likely to benefit the stock in the long term. Las Vegas Sands has an enticing dividend yield of 5.41%, trumping the Standard & Poor’s (S&P) 500 average of 2.7%. Performance has been strong in 2016, with a YTD return of 18.75%. LVS has a market cap of $40.2 billion.
Time Warner
Time Warner Inc. (TWX) is a media and entertainment company that operates through three segments: networks, film and television entertainment and publishing. It reported encouraging earnings in the first quarter of 2016 as a result of rising subscriptions in its Turner Broadcasting unit and popular cable channel, Home Box Office (HBO), home to fantasy drama television series "Game of Thrones." As of July 26, 2016, Time Warner had provided investors with an impressive YTD return of 22.27%, strongly outperforming the diversified media industry average return of 1.79%. TWX has a market cap of $61.6 billion and 1.92% dividend yield. Its P/E ratio of 15.8 makes it cheaper than many of its competitors.
