Comprehensive Analysis on Walt Disney and Time Warner: Intense Competition, Steady Returns

 Comprehensive Analysis on Walt Disney and Time Warner: Intense Competition,
                                Steady Returns

  PR Newswire

  LONDON, January 22, 2013

LONDON, January 22, 2013 /PRNewswire/ --

The Walt Disney Company (NYSE: DIS) recently sent ripples across the industry
with its $4 billion purchase of LucasFilm. As the landscape in the Diversified
Entertainment industry changes, StockCall published comprehensive technical
analysis on Walt Disney Company and Time Warner Inc. (NYSE: TWX). You can sign
up now to access these free reports at 

The acquisition offered Disney a chance to boost its position in the high-tech
fantasy film area, which is already pretty strong after the billion dollar
purchases of Marvel Entertainment and Pixar Animation. The entertainment
sector is becoming increasingly competitive and resource-intensive. With big
bucks involved, the sector is also likely to become the investors' choice for
a high growth portfolio. Download your free report on Walt Disney now at 

With more than $92 billion in market capitalization, Disney is a safe stock
for investors looking for long-term investment. However, in the short-run, the
company has to face increased competition and drain on its financial
resources, thanks to its high profile acquisitions. Disney is not immune to
the fundamental shift occurring in the entertainment sector. With the
onslaught of On-Demand services like Netflix, the company is looking at a
bleak scenario when it comes to deriving revenue from licensing and affiliate
fees. However, if we look at Disney's acquisition model, it seems that the
company is going to pay big attention to more lucrative and riskier fantasy
movie sector. These acquisitions will help Disney produce movies based on
established themes. This niche sector mainly caters to an established fan base
and thus offers somewhat assured returns. However, although this does not mean
that the sector is fool proof, Disney is more likely to make a hit out of it
rather than a miss.

Disney is also looking to fuel its growth by diversifying. The entertainment
company is looking to expand its operations in growing markets in Asia. It is
also signing new distribution deals to counter growing competition. One of its
latest collaboration with Netflix is likely to yield positive benefits in the
coming quarters. Under this deal, Disney will be offering first run contents
to Netflix.

However, things do not look so good for another entertainment and media
company, the Time Warner Inc. [ Free Research for TWX ] ^[ ^1 ^] . The company
is looking to report its fourth quarter and full year financial numbers on
February 6 ^th . While Time Warner had recently reiterated its full year
guidance, the results are likely to be lukewarm at the best.

Both Disney and Time Warner offer mild dividend yields at 1.5% and 2%
respectively. However, their solid financial status makes them reasonably safe
stocks to invest in. Disney's strong potential for generating high free cash
flows in the near future ensures that the company would be able to retain its
dividend paying track record, while the same cannot be said about Time Warner
with much confidence.

Disney also offered more than 35 percent growth in its stock price in the last
12 months, giving substantial return to its investors. Time Warner, on the
other hand, lagged slightly, with 32% growth. However, the stock is currently
in the bullish phase after attaining its new 52-week high. Warner is also
looking to intensify its competition with Disney after forming its own
animation unit. The company plans to release at least one movie each year.
While it is too early to predict the financial results of this move, it looks
like a step in the right direction.


1.Time Warner Inc. Technical Analysis [ ]

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