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8 May 2024, Q2 Financial Update
- Q2 revenue at $22.1bn, up 1% year-on-year
- Operating income of $3.85bn against $3.29bn in Q2 2023
- Q2 earnings per share of $1.21 compared with $0.93 year-on-year
- D2C division, including Disney+ and Hulu, records $47m operating profit compared with $587m loss a year earlier
- Company says 2023 turnaround/growth initiatives “have continued to yield positive results”.
The Walt Disney Company (DIS) is a worldwide entertainment company whose subsidiaries and affiliates include Disney Parks, Experiences and Products (including Disneyland resorts); Disney Media & Entertainment Distribution (including Disney+ and ESPN+); and four content groups.
The content groups cover: Studios Content (including Walt Disney Animation and Marvel Studios); General Entertainment (including abc News), Sports and International.
Here’s what there is to know about buying and selling Walt Disney shares.
Why own stocks?
It’s worth asking yourself why you want to buy shares. Are you looking for capital growth, income from dividends or a combination of both? Your investment objectives will determine what type of shares you may want to invest in, whether high-growth technology shares or more defensive companies with a dividend stream.
Most investors look for sound fundamentals, including a track record of consistent earnings growth, a strong market position or products and services with future growth potential. These should provide a platform for future share price growth.
That said, other factors such as takeover rumours can drive up a company’s share price. Some investors may also be attracted by recovery plays, with a depressed share price providing the potential for a rebound.
How to buy stock
Once you’ve decided which company to invest in, there are several steps to buying shares.
1) Open an account
Whether you’re a seasoned trader, or new to stock market-based investments, you’ll need to open an account with a regulated brokerage to buy shares in Disney.
Stockbroking is a competitive market place and services for DIY investors come in a range of guises – from online investing platforms run by some of the biggest names in financial services, to investment trading apps that work off your smartphone or tablet.
Before opening an account, here are some things to bear in mind:
- Keep your ultimate financial goals in mind
- Be prepared to ride out stock market ups and downs
- Aim to keep trading costs to a minimum
- Remember that share investing can prompt tax charges, for example, when selling part of your portfolio, unless you use a tax-efficient wrapper such as an Individual Savings Account (ISA).
Before buying any shares, it may be worth asking yourself these questions:
- Should I take financial advice?
- Am I comfortable with the level of risk in question?
- What’s my investing budget?
- Can I afford to lose money?
- Do I understand the company in which I’m looking to invest?
- Am I protected if my platform provider/adviser goes out of business?
2) Where is Disney traded?
The ticker symbol for Disney is DIS. It’s listed on the New York Stock Exchange which is open for trading from 9.30am till 4pm (ET). You should be able to buy Disney through the vast majority, if not all, brokerage accounts.
Buying shares in US dollars incurs a foreign exchange fee (typically around 1%) unless you fund the purchase from a US dollar account.
Most brokerages also charge a slightly higher transaction fee for buying US, rather than UK, shares although it’s worth comparing the fees charged by different brokers if you plan to trade US shares regularly.
You will be required to complete a W-8BEN form (valid for three years) which allows you to benefit from a reduction in withholding tax for qualifying US dividends and interest from 30% to 15%.
Holding US shares also carries exposure to foreign exchange risk. If the pound strengthens against the dollar, your shares will be worth less in sterling (and vice versa).
As with UK shares, any profit on US shares will be subject to Capital Gains Tax, unless they are held in an ISA or self-invested personal pension.
Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.
Tax treatment depends on one’s individual circumstances and may be subject to future change.
The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice.
3) Do your research
To find out more about Walt Disney, visit the company’s online investor relations page.
It also may be worth comparing Disney’s valuation to other comparable energy companies. One way of doing this is to look at their relative price-earnings ratios (or P/Es) – shares trading on a high P/E have high expectations of substantial future growth.
Another useful research tool is brokers’ 12-month share price forecasts which can be found on financial websites.
Walt Disney 5-Year Share Price Performance
4) What’s your investing strategy?
People tend to invest in one of two ways: either with a lump sum purchase, or via smaller, steadier amounts over time.
The latter method benefits from a process known as ‘pound cost averaging’, a stock market technique which helps you pay less per share on average over time in falling stock markets. Rather than waiting to build up a lump sum, it also means an investor’s money can be put to use in the market straightaway.
Note that drip-feeding an investment may sacrifice capital growth if the share price is rising and you will also pay more in share-trading fees.
It is worth mentioning that both methods have their advantages and disadvantages.
5) Place an order
Once you’re ready to buy Disney shares, log in to your investing account or trading app. Type in the DIS ticker along with the number of shares you want to buy or the amount of money you’re looking to invest.
Many brokers allow you to add a ‘stop loss’ once you have bought the shares, which allows you to limit your losses should a share price fall.
6) Review Disney’s performance
Whether your share portfolio is crammed full of companies or holds only a handful of stocks, it’s vital that you review how each component is performing on a regular basis: monthly, quarterly, or annually.
Doing this gives you the opportunity to review performance and consider whether any adjustments to your holdings are required – to maintain the status quo, buy more stock, or sell existing shares.
How to sell stock
Tax treatment depends on one’s individual circumstances and may be subject to future change.
The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice.
At some point, you may want to sell your holdings. To do this, log in to your investing platform, type in the DIS ticker and select the number of shares you want to sell.
Note that if you’ve made a substantial profit, you may be liable for CGT. The CGT tax-free allowance for the tax year 2022-23 is £12,300.
How to invest in Disney via a fund
Investing directly in individual stocks can be an absorbing and, hopefully, profitable experience. It may also qualify you for shareholder perks specific to the company in question.
Investing directly in companies can leave you more vulnerable to stock market volatility and unforeseen swings in share prices.
That’s why financial experts typically recommend that most people invest in a diversified mix of asset classes and funds that hold a ready-made portfolio of upwards of 50 different company shares. Being a large global corporation as well as being a major component of the US stock market, Disney is found in many global, US equity and index tracker funds.
