Disney vs Netflix: Here's which stock would have made you richer if you invested $1,000 10 years ago
On October 16, 1923, Walt and Roy Disney founded The Walt Disney Company and, nearly a century later, the company is one of the largest and most successful media conglomerates in the world. One of its next moves is to expand into the video streaming industry, challenging leading competitors such as Netflix.
Investing in either company 10 years ago would have been a good bet. But which would have made you richer? The answer is Netflix.
According to CNBC calculations, a $1,000 investment in Netflix in October 2008 would be worth more than $97,560 as of after the earning bell on Monday, or more than 96 times as much, including price appreciation and dividends reinvested.
If you put $1,000 in Disney at the same time, your investment would be worth $5,123 now, or more than four times as much. That's about $92,437 less than you would made betting on Netflix.
CNBC: Netflix stock as of October 2018.
Netflix and Disney's stock have performed well over the last decade, but any individual stock can over- or underperform and past returns do not predict future results.
Some analysts have concerns about Netflix. The company is going to report earnings Tuesday and there are fears the stock could dip. Morgan Stanley, Goldman Sachs and Raymond James all recently slashed their 12-month forecasts because of concerns the company's growth will slow as interest rates continue to rise.
Meanwhile, Disney recently was outbid for British satellite TV provider Sky by CNBC parent company Comcast.
Still, investors are generally optimistic about both companies.
"While broader market performance and rising rates have been more important factors for stock price performance," Goldman's analyst Heath Terry said of Netflix in a note to clients, "we believe that upside to consensus expectations and what the strength in subscriber net additions says about Netflix's business, beyond guidance for the next quarter, is likely to be a positive catalyst for the stock."
CNBC: Disney stock as of October 2018.
And Jim Cramer, host of CNBC's "Mad Money," places Disney at No. 1 in his power ranking of the top five communications services. "Now that all the deal-making distractions are behind them," he says, "I love the way things are set up for Disney. For ages, this stock had been held back by worries about subscriber losses in one of their marque properties, ESPN.
"But lately, Disney has made a push into subscription-based online streaming services, including ESPN Plus, which … already has over one million subscribers. And let's not forget," Cramer adds, "between Star Wars and Marvel Comics, they've got some incredibly lucrative film products."
In the same power ranking, Netflix lands at No. 5.
If you're looking to invest in Netflix, Disney or just the stock market in general, experienced investors like Warren Buffett, Mark Cuban and Tony Robbins suggest you start with index funds, which hold every stock in an index, offer low turnover rates, attendant fees and tax bills. They also fluctuate with the market to eliminate the risk of picking individual stocks.
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