Should I consider investing in Disney?

Like any household with kids, Disney is a big name with our kids. They love Disney movies, characters, and toys. 

The other day, both Kid 1.0 and Kid 2.0 asked me if they should invest their gift money in Disney stocks and become Disney shareholders, rather than investing in XEQT, the all-in-one ETF. Their reason? A lot of their school friends talk about Disney and they thought it’d be a good idea to become owners of this well-known company

“Disney must be making so much money with their movies and theme parks.” 

“My friends went to Disneyland for Christmas and it cost so much money,” both kids stated. 

As an investor and a personal finance blogger, I really enjoyed both kids asking investing related questions, because these questions forced me to simplify my explanations. To be perfectly honest, I have a tendency to over complicate my explanations, since I like to use lots of numbers to back up my explanations…

On a not-unrelated note, I guess Mrs. T and I are doing something right and that I have not failed as a father… 

So what did I answer my kids? Should they buy some Disney stock shares? 

Should I consider investing in Disney?

For this analysis, I kept it as simple as possible, since I was explaining to my kids whether or not they should invest in Disney stocks and become shareowners. 

Essentially, I went with a 30,000 foot view type of explanation rather than getting into the nitty gritty and all the different financial numbers. 

With that in mind, let’s take a look at how I answered this question from my kids.

Are recent Disney movies any good?

For those of you that aren’t familiar with Disney, the Walt Disney Company owns many different business assets. Film production Companies like Walt Disney Pictures, Walt Disney Animation Studios, Pixar, Marvel Studios, Lucasfilm, 20th Century Studios, and Searchlight Pictures are under the Walt Disney Studios division. Each of these companies makes and distributes films. 

Since a big part of the Disney business is making movies, I asked both kids if they liked Disney movies that we watched recently.

  • Star Wars: The Rise of Skywalker – both kids thought the movie was nowhere as good as the original Star Wars trilogy 
  • Ron’s Gone Wrong – enjoyed the movie and thought it was funny
  • Diary of a Wimpy Kid – didn’t like it, they liked the non-animated version better 
  • Soul  – didn’t like it although both Mrs. T and I enjoyed watching it 
  • Luca – enjoyed the movie but wouldn’t watch it again 
  • Turning Red – it was funny but thought other Pixar movies were better 
  • Onward– both kids thought it was a great movie.
  • Chip ‘n Dale: Rescue Rangers – thought it was a silly movie but didn’t love it
  • The One and Only Ivan – liked the movie
  • Frozen II – both liked the movie but thought the first one was way better 
  • Toy Story 4 – it was OK, liked the first three better
  • Ralph Breaks the Internet – loved the movie
Ralph Breaks the Internet
We all really enjoyed watching Ralph Breaks the Internet

Other non-kids movies that Mrs. T and I watched and our thoughts:

  • The King’s Man – meh, it was OK. The previous two King’s Man movies were way better 
  • Death on the Nile – A decent movie, but wouldn’t watch it in the theatre though 
  • Prey – Not a great movie. 
  • Obi-Wan Kenobi – we both liked it, loved how the Obi-Wan Kenobi series filled in the gaps between the first and second trilogy.
  • Black Widow – meh, that’s all I got to say. 
  • Shang-Chin and the Legend of the Ten Rings – The movie was great until toward the end. The end was completely silly and ruined the story. 
  • Eternals – What a waste of time 
  • Spider-Man: No Way Home – we both liked it a lot
  • Doctor Strange in the Multiverse of Madness – the story was weak and I only watched it on the plane because I had to kill time
  • Thor: Love and Thunder – the other Thor movies were way better. The storyline was a meh
  • Black Panther: Wankanda Forever – the movie was OK but both Mrs. T and I felt that the majority of the Marvel movies that came out after Avengers: Endgame were not as good. 
  • Cruella – an enjoyable movie, mostly because of Emma Stone’s strong performance 

Then for the million dollars questions – would you pay $15 to watch the movie at the theatre? I proposed the question to both kids. 

The answer?

For the most part, they wouldn’t spend $15 to watch these Disney movies at the theatre. They’d rather watch them at home via streaming or borrow DVDs from the library. The only movies they’d consider watching at the theatre were “Frozen II” and” Ralph Breaks the Internet.”

For Mrs. T and I, we both feel that 99% of the recent Marvel movies (released after Avengers: Endgame) sucked big time. The stories were weak and the studio was simply trying too hard to tie all the movies together to create the next chapter for Marvel movies. The only one that was really worth watching at the theatre was Spider-Man: No Way Home. We certainly wouldn’t spend $15 and go out of our way to watch movies like “Eternals,” “The King’s Man,” or “Black Widow”. 

Do you need Disney+?

Next, I wondered about Disney+ streaming service. Disney+ is facing a lot of competition in this space, such as Netflix, Apple TV+, and Amazon’s Prime Video. Do people actually feel the need for Disney+ when they’re already paying for another streaming service?

When we were in Denmark for Christmas, Mrs. T’s parents had Netflix, so we let both kids watch kids’ shows and movies on Netflix occasionally. Most of the time they were able to find shows or movies that they wanted to watch right away. From time to time, it might take five minutes for them to decide. Overall, they both seemed satisfied with the content Netflix had.

So I asked them – did they feel that they were missing out with only Netflix in Denmark and wanted to watch Disney movies? Or was Netflix content sufficient? 

Unsurprisingly, they both told me that they were happy with the Netflix content. To them, paying extra money just to be able to watch some Disney movies and shows was not worth it.

Based on this answer, I assumed many families across the world end up with the same conclusion – if they had to pick a streaming service, they probably would pick Netflix over Disney+. This is probably one of the reasons why Netflix has a subscriber base of 230.75 million while Disney+ only has a subscriber base of 161.8 million (~30% less). 

In addition, I asked both kids how much it would cost to make movies and shows. They were shocked to learn that “Frozen II” cost $150 million to make, “Toy Story 4” cost $200 million to produce, and “Thor: Love and Thunder” cost $250 million to make.  

Sure, “Frozen II” and “Toy Story 4” both made billions at the box office and “Thor: Love and Thunder” made over $760 million, but whichever way you slice it, it costs a lot of money to make movies and shows and the investment doesn’t always pay off. Furthermore, there are movies like “Black Widow” that cost millions to make but only made a small profit.

Would you go to Disneyland or Universal Studio?

We all know Disney makes a lot of money from their theme parks around the world. So I asked both kids – would you rather go to Disneyland or Universal Studio? I explained to them that Disneyland had characters and rides from Disney, Star Wars, and Marvel while Universal Studio had Harry Potter rides.

To my surprise, both kids preferred Universal Studio because they really really love Harry Potter. 

Kid 1.0 also told me that his friends that went to Disneyland all ended up waiting in line for a long time and it was not all that much fun.  

Does Disney pay dividends?

Since we talk about dividends a lot at home, both kids asked if Disney pays any dividends. Both of them seemed to understand the value of having your money working hard for you, getting regular pay cheques, and reinvesting the money to maximize the power of compounding.

They were both disappointed to learn that Disney only started paying dividends in late 2011 and stopped paying dividends in December 2019. Furthermore, the historical yield was less than 1.6% so the dividend payment amounts were low relative to the amount of money invested.

Did my kids invest in Disney? 

So, did my kids invest in Disney? Based on the four questions I asked them, they decided that it was not worth it to invest in Disney shares. They decided they were better off investing in XEQT and owning a small portion of many different valuable companies. 

I was very pleased with their decision because I believe it was the correct decision. 

From a macro level, I think Disney is facing more and more challenges in all of their businesses. It costs a lot of money to make new content and all the new movies and shows don’t always pay off.

Other streaming competitors like Netflix, Apple, and Amazon are pumping billions into creating great content so Disney’s so called “monopoly” on great content just isn’t there anymore. 

While theme parks are excellent revenue generators for Disney, the theme parks are getting too expensive for budget-conscious families, especially since many families are struggling to keep up with the increasing cost due to high inflation. 

If I were a Disney shareholder today, I’d be worried. 

Dear readers, would you invest in Disney now? Are you a Disney shareholder? 

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21 thoughts on “Should I consider investing in Disney?”

  1. I had a large position in Disney and I used to love the fact that they have a huge moat around so much intellectual property, but I sold all my shares recently given the content they are producing now. It is not the Disney I remember from my childhood anymore. They got too invested in identity politics and are pushing the LGBTQ agenda on kids, while kids should remain innocent for as long as possible and discover life at their own pace. I would not let my kids watch anything Disney related anymore. Go woke go broke.

  2. What can I say… This is a very honest and fair review of Disney! Indeed, the quality of the content that they produce in the last year is more of an “average level” than something amazing … And in view of the serious competition, investing in these shares looks at least risky)

  3. The fact that your (young!) kids could come up with their own reasoning for investing in VEQT over Disney is truly amazing. You’ve taught them well!

    So did you end up buying VEQT for their RESP?

    • In addition to their RESPs, they have a joint investing account (under my wife’s name). And yes, they bought some more XEQT with their gift money.

  4. I’d be okay with investing in Disney, but it wouldn’t be a major holding. We’re watching a lot of the Marvel Cinematic Universe now (about a movie a day) and we’re up to Captain Marvel in about a month.

    It’s all on streaming and I got a subscription for cheap a while ago. They’ll make maybe $5 from us for all that entertainment, this month. Oh well. We’re also going to Disneyland in about 10 days, so yes that will be expensive.

    Usually kids are only investing a few dollars, so I would like them to invest in something they like.

    • Honestly, the movies after End Game weren’t that great. I quite enjoyed Captain Marvel. Yea a small holding might be holding but it probably will stay flat or down in the immediate future.

  5. A lot of headwinds for Disney. One you didn’t mention was that the governor of Florida wants to hurt them. There are better opportunities for sure.

  6. Not a Disney stockholder. For me, 95% of my portfolio is in traditional index ETFs/funds, bond funds, treasuries and REITS/syndications. That last 5% is my gambling money and Disney is too “boring” of a gamble. I do own some NetFlix which I bought on the “dip” as I thought they were punished a bit too much a few months ago. I know buying small amounts of shares based on limited analysis and “gut feel” is dumb but then again, so is playing blackjack at the casino. I do both but since I enjoy a small bit of gambling, it’s worth it to me. So far, this hobby is earning me money but on a risk adjusted basis, I know I’m better off just buying a broad based index fund.

    • Hi Phillip,

      Having 5% of your portfolio as a “gamble” account makes a lot of sense. I’ve written about this many times… this way, at least you’re limited on any potential losses. 🙂

  7. Bravo! You are such a thoughtful and good father to have such age-appropriately detailed and well-balanced conversation with your children!

    Can you please make this a weekly series where you consider different companies and kid-explain whys/whynots of investing in companies?

    Fyi I did invest in Disney stock briefly (at what I thought was a cheap price) and then sold soon after because of most of the reasons you mentioned. Unless I already invested 10+ years ago, in general the media entertainment/streaming has so much competition now adays, I find them all to be too risky to invest any penny at this point…

  8. Interesting discussion.

    (1) The only good recent Marvel movie was Shang Chi.

    (2) I would rather invest in Johnson & Johnson instead.

  9. Easy answer no….company has a lot of debt, still needs to recoup the earnings they lost after the pandemic. I don’t think that they will go bankrupt or anything like that, but there aren’t many factors in which I am wowed by the company either.

  10. My only comment, and hasn’t really a whole lot to do with the topic is that Prey was a really important movie. It was a complete North American Indigenous movie cast and also dubbed in Comanche (a first). Some meaningful needed action happened here that isn’t just about making movies.

    “You so rarely see a period piece where indigenous people get to be full people. It’s either people who are very savage or overly spiritual. So getting to show a variety of personalities with social dynamics and all kinds of things like that, and inside of a movie [series] like Predator, which is also just fun and exciting and entertaining, to me is just like the best thing in the world.”

    Oh, and IU thought it was fantastic (as well a lot filmed near Calgary

    • Missed the last part of that final sentence and comments don’t have an edit unfortunately. Sorry to add more to this commentary, I just feel strongly about anything that can be done to lift Indigenous voices, to make space for the culture and peoples.
      Not only filmed near Calgary but on First Nations territory > “The majority of Prey was filmed at the Stoney Nakoda Nation near Calgary, Alberta, Canada. This is indigenous land that belongs to the Nakoda First Nations band governments, located at the foot of the Rocky Mountains in Canada.”

      • That’s a very good point Chris, regardless of whether Prey was an enjoyable movie or not, I think it’s important to lift indigenous and other minority voices in films.


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