The Walt Disney (NYSE:DIS) and Activision Blizzard (NASDAQ:ATVI) are both large-cap consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.
Analyst Ratings
This is a summary of current ratings and recommmendations for The Walt Disney and Activision Blizzard, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| The Walt Disney | 0 | 3 | 21 | 0 | 2.88 |
| Activision Blizzard | 0 | 2 | 20 | 0 | 2.91 |
The Walt Disney currently has a consensus price target of $210.3750, indicating a potential upside of 19.53%. Activision Blizzard has a consensus price target of $113.4545, indicating a potential upside of 50.75%. Given Activision Blizzard's stronger consensus rating and higher probable upside, analysts clearly believe Activision Blizzard is more favorable than The Walt Disney.
Volatility and Risk
The Walt Disney has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Activision Blizzard has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.
Earnings and Valuation
This table compares The Walt Disney and Activision Blizzard's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| The Walt Disney | $65.39 billion | 4.89 | $-2,864,000,000.00 | $2.02 | 87.13 |
| Activision Blizzard | $8.09 billion | 7.24 | $2.20 billion | $3.25 | 23.16 |
Activision Blizzard has lower revenue, but higher earnings than The Walt Disney. Activision Blizzard is trading at a lower price-to-earnings ratio than The Walt Disney, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares The Walt Disney and Activision Blizzard's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| The Walt Disney | 1.77% | 3.78% | 1.68% |
| Activision Blizzard | 29.17% | 17.05% | 11.35% |
Institutional and Insider Ownership
64.1% of The Walt Disney shares are owned by institutional investors. Comparatively, 85.2% of Activision Blizzard shares are owned by institutional investors. 0.3% of The Walt Disney shares are owned by insiders. Comparatively, 0.8% of Activision Blizzard shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Summary
Activision Blizzard beats The Walt Disney on 10 of the 14 factors compared between the two stocks.
