Head-To-Head Review: Time Warner (TWX) & Walt Disney (DIS)

Time Warner (NYSE:TWX) and Walt Disney (NYSE:DIS) are both consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, institutional ownership, dividends, profitability, analyst recommendations, earnings and valuation.

Institutional & Insider Ownership

78.9% of Time Warner shares are held by institutional investors. Comparatively, 64.8% of Walt Disney shares are held by institutional investors. 0.2% of Time Warner shares are held by company insiders. Comparatively, 0.4% of Walt Disney shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Time Warner pays an annual dividend of $1.61 per share and has a dividend yield of 1.6%. Walt Disney pays an annual dividend of $1.76 per share and has a dividend yield of 1.3%. Walt Disney pays out 24.9% of its earnings in the form of a dividend. Walt Disney has raised its dividend for 2 consecutive years.

Profitability

This table compares Time Warner and Walt Disney’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Time Warner N/A N/A N/A
Walt Disney 18.46% 20.50% 10.68%

Valuation and Earnings

This table compares Time Warner and Walt Disney’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Time Warner N/A N/A N/A N/A N/A
Walt Disney $59.43 billion 3.44 $12.60 billion $7.08 19.38

Walt Disney has higher revenue and earnings than Time Warner.

Analyst Recommendations

This is a breakdown of current ratings for Time Warner and Walt Disney, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Time Warner 0 5 0 0 2.00
Walt Disney 1 3 18 0 2.77

Time Warner presently has a consensus target price of $100.63, indicating a potential upside of 1.88%. Walt Disney has a consensus target price of $134.38, indicating a potential downside of 2.08%. Given Time Warner’s higher possible upside, equities research analysts plainly believe Time Warner is more favorable than Walt Disney.

Summary

Walt Disney beats Time Warner on 8 of the 12 factors compared between the two stocks.

Time Warner Company Profile

Time Warner Inc. operates as a media and entertainment company in the United States and internationally. It operates through three segments: Turner, Home Box Office, and Warner Bros. The Turner segment creates and programs branded news, entertainment, sports, and kids multi-platform content for consumers. It operates approximately 175 channels in 200 countries and territories. The Turner segment's networks and related businesses and brands include TNT, TBS, Adult Swim, truTV, Turner Classic Movies, Turner Sports, Bleacher Report, Cartoon Network, Boomerang, CNN, HLN, and iStreamPlanet; and digital properties comprise tntdrama.com, TBS.com, adultswim.com, and cartoonnetwork.com, as well as NBA.com, the NBA League Pass property, NCAA.com, the NCAA March Madness Live app, and PGA.com. It also licenses its original programming, and its brands and characters for consumer products and other business ventures. The Home Box Office segment provides premium pay and basic tier television, and video content services comprising HBO and Cinemax; operates HBO NOW, a video content service; and sells original programming through physical and digital formats, as well as licenses original programming through international television networks and video content services. As of December 31, 2017, this segment had 54 million domestic subscribers. The Warner Bros. segment produces, distributes, and licenses television programming and feature films; distributes digital and physical home entertainment products; and produces and distributes games, as well as licenses consumer products and brands. Time Warner Inc. serves cable system operators, satellite service distributors, telephone companies, and virtual multichannel video programming distributors, as well as digital distributors. The company was formerly known as AOL Time Warner, Inc. and changed its name to Time Warner Inc. in 2003. Time Warner Inc. was founded in 1985 and is headquartered in New York, New York.

Walt Disney Company Profile

The Walt Disney Company, together with its subsidiaries, operates as an entertainment company worldwide. The company's Media Networks segment operates cable programming businesses under the ESPN, Disney, and Freeform brands; broadcast businesses, including ABC TV Network and eight owned television stations; and radio businesses. It also produces original live-action and animated television programming to first-run syndication and television markets; and subscription video-on-demand services and in home entertainment formats, as well as operates ESPN+, a direct-to-consumer streaming service providing multi-sports content. Its Parks and Resorts segment owns and operates the Walt Disney World Resort in Florida and the Disneyland Resort in California. This segment also operates Disney Resort & Spa in Hawaii, Disney Vacation Club, Disneyland Paris, Disney Cruise Line, and Adventures by Disney; and manages Hong Kong Disneyland Resort and Shanghai Disney Resort, as well as licenses its intellectual property to a third party for the operations of the Tokyo Disney Resort in Japan. The company's Studio Entertainment segment produces and acquires live-action and animated motion pictures for distribution in the theatrical, home entertainment, and television markets primarily under the Walt Disney Pictures, Pixar, Marvel, Lucasfilm, and Touchstone banners. This segment also produces stage plays and musical recordings; licenses and produces live entertainment events; and provides visual and audio effects, and other post-production services. Its Consumer Products & Interactive Media segment licenses its trade names, characters, and visual and literary properties; develops and publishes mobile games, books, magazines, and comic books; distributes branded merchandise directly through retail, online, and wholesale businesses; offers Website management and design; and develops and distributes online video content. The company was founded in 1923 and is based in Burbank, California.

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