Motley Fool: The money mouse: Disney’s deep portfolio
If you went to the movies last year, you likely contributed to Disney’s (NYSE: DIS) record box-office haul. Four films (“Star Wars: The Force Awakens,” “Captain America: Civil War,” “Zootopia” and “Finding Dory”) crossed $1 billion in global receipts, with “Jungle Book” falling just short of that. Each of its major studios – Disney Pictures, Marvel, Disney Animation, Lucasfilm and Pixar – helped Disney rake in more than $7.5 billion in total box-office receipts.
That’s how Disney overcame weakness in its core media business and posted fiscal 2016 earnings up 12 percent over year-ago levels and revenue up 6 percent. It was the sixth straight year that Disney’s deep portfolio of global brands has powered record operating results.
Still, the company faces challenges, such as falling subscriber counts at ESPN, Disney Channel and its other cable properties, and Disney’s ABC has been losing viewers to streaming services. Domestic theme park attendance has also declined in recent quarters.
On the other hand, Disney World is getting an “Avatar”-themed expansion, and Star Wars Land will open at both Disneyland and Disney’s Hollywood Studios in 2019. The eighth installment of the “Star Wars” franchise hits screens in December, and millions have been visiting China’s new Shanghai Disneyland. Disney offers patient believers a growing dividend that recently yielded 1.4 percent. (The Motley Fool owns shares of and has recommended Walt Disney.)
Ask the Fool
Q: How can I tell whether a company pays a dividend, and how big it is? – C.B., Muskegon, Michigan
A: You can always just call it and ask – start with the Investor Relations department. It’s also easy to look it up online or in newspaper stock listings. Instead of the dividend itself, many stock listings include the dividend yield, which is the percentage of the current stock price being paid out annually in dividends. If there’s a yield, it means there’s a dividend.
To figure out the dividend from the yield, multiply the yield by the stock price. Imagine that Whoa Nellie Brake Co. (ticker: HALTT) is trading at $80 per share with a yield of 2 percent (which is 0.02). Multiply 0.02 by 80, and you’ll get 1.60, meaning that the company is currently paying out $1.60 each year in dividends per share. (Companies often pay dividends quarterly, so this would be $0.40 per quarter.)
If you’re looking for promising stocks that pay significant dividends, grab a free trial of our “Motley Fool Income Investor” newsletter at fool.com/shop/newsletters.
Q: I know that spending money can spur the economy. Does saving hurt it? – R.D., Saratoga, New York
A: Spending does boost the economy, as the demand for products and services increases, helping businesses grow and prosper. The economy can also benefit from increased national savings, though, because more money in banks means more money is available to be loaned out to buy homes, cars and educations. Companies can borrow, too, to grow their businesses.
So go ahead and save – for retirement and other financial goals. Be sure you have three to 12 months’ worth of living expenses saved in an emergency fund, too.
My dumbest investment
My dumbest mistake was buying a gold coin that was supposedly graded 63. I didn’t understand at the time that there are different grades – and a lot of ways to be taken advantage of in gold investments.
Turns out my “investment” may really be a 55, making it worth a lot less than I paid for it. I still own it. I’ll let the kids inherit it, along with the lesson not to invest in something you don’t know enough about. – T.B., online
The Fool responds: Gold is a tricky kind of investment. For starters, understand that although many people think of it as a safe financial refuge, especially in uncertain markets, it’s quite volatile. An ounce recently cost about $1,245, but that’s significantly lower than levels a few years ago. Gold closed at nearly $600 per ounce in 1980, and then didn’t close above that until 2006.
In many years, gold is not your best investment choice. According to economist Jeremy Siegel, between 1802 and 2012, gold averaged an inflation-adjusted annual return of just 0.7 percent, versus 6.6 percent for stocks and 3.6 percent for bonds.
Still, if you want some of your overall portfolio in gold, remember that not only can you buy the physical metal, you can also invest in the stock of gold mining and production companies, and in mutual funds and ETFs that are invested in the metal and/or gold companies. Learn more before investing in gold.