DIS stock is worth at 10% more than today's price, assuming its dividend comes back higher
Disney (NYSE:DIS) is likely to reach new highs once its
earnings come out after the market closes on Feb. 11. DIS stock is down 3%
year-to-date, but this downdraft could easily turn around after the earnings
release.
The main reason is investors will see how powerful its
over-the-top (OTT) streaming subscription services have become. For example,
with 120 million subscribers the company is now the second-largest OTT
subscription-based entertainment provide after Netflix (NASDAQ:NFLX). This
includes Disney+ (which has been a huge success since it started last year,
Hulu and ESPN).
Moreover, I believe Disney could announce a hike in their
dividend per share. This is because it typically has jacked up the dividend
more than once in 12 months.
Disney has not paid a dividend in the past year. The company
previously cited Covid-19 (with little explanation as to why) and its desire to
focus on direct-to-consumer (DTC) initiatives.
I believe at some point during 2021 they will relinquish and decide to pay
the dividend again.
Moreover, as one analyst points out in Seeking Alpha, the
company’s theme parks, a quarter of their revenues, should begin to reopen and
normalize over the next year. This will act as another positive catalyst for
DIS stock as those revenues return. Its parks are the largest theme and
experience parks in the world and are hard to replicate. In the past, they have
attracted 155 million visitors, with high prices. This is two-and-half times
the next highest similar park system.
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