Walt Disney (NYSE:DIS – Get Free Report) and NetEase (NASDAQ:NTES – Get Free Report) are both large-cap communication services companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.
Analyst Ratings
This is a summary of current recommendations and price targets for Walt Disney and NetEase, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Walt Disney | 1 | 3 | 16 | 1 | 2.81 |
| NetEase | 0 | 3 | 6 | 0 | 2.67 |
Walt Disney presently has a consensus price target of $127.61, suggesting a potential upside of 24.36%. NetEase has a consensus price target of $160.57, suggesting a potential upside of 38.20%. Given NetEase’s higher probable upside, analysts clearly believe NetEase is more favorable than Walt Disney.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Walt Disney | 8.70% | 9.90% | 5.63% |
| NetEase | 27.86% | 19.50% | 14.45% |
Dividends
Walt Disney pays an annual dividend of $1.50 per share and has a dividend yield of 1.5%. NetEase pays an annual dividend of $1.91 per share and has a dividend yield of 1.6%. Walt Disney pays out 30.9% of its earnings in the form of a dividend. NetEase pays out 26.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. NetEase is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility & Risk
Walt Disney has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500. Comparatively, NetEase has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.
Valuation and Earnings
This table compares Walt Disney and NetEase”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Walt Disney | $94.42 billion | 1.88 | $12.40 billion | $4.85 | 21.16 |
| NetEase | $16.11 billion | 4.62 | $4.83 billion | $7.26 | 16.00 |
Walt Disney has higher revenue and earnings than NetEase. NetEase is trading at a lower price-to-earnings ratio than Walt Disney, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
65.7% of Walt Disney shares are held by institutional investors. Comparatively, 11.1% of NetEase shares are held by institutional investors. 0.2% of Walt Disney shares are held by company insiders. Comparatively, 54.7% of NetEase shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Summary
NetEase beats Walt Disney on 9 of the 17 factors compared between the two stocks.
About Walt Disney
The Walt Disney Company operates as an entertainment company worldwide. It operates through three segments: Entertainment, Sports, and Experiences. The company produces and distributes film and television video streaming content under the ABC Television Network, Disney, Freeform, FX, Fox, National Geographic, and Star brand television channels, as well as ABC television stations and A+E television networks; and produces original content under the ABC Signature, Disney Branded Television, FX Productions, Lucasfilm, Marvel, National Geographic Studios, Pixar, Searchlight Pictures, Twentieth Century Studios, 20th Television, and Walt Disney Pictures banners. It also offers direct-to-consumer streaming services through Disney+, Disney+ Hotstar, Hulu, and Star+; sports-related entertainment services through ESPN, ESPN on ABC, ESPN+ DTC, and Star; sale/licensing of film and episodic content to third-party television and VOD services; theatrical, home entertainment, and music distribution services; DVD and Blu-ray discs, electronic home video licenses, and VOD rental services; staging and licensing of live entertainment events; and post-production services. In addition, the company operates theme parks and resorts comprising Walt Disney World Resort, Disneyland Resort, Disneyland Paris, Hong Kong Disneyland Resort, Shanghai Disney Resort, Disney Cruise Line, Disney Vacation Club, National Geographic Expeditions, and Adventures by Disney, as well as Aulani, a Disney resort and spa in Hawaii. It also licenses its intellectual property to a third party for operations of the Tokyo Disney Resort; licenses trade names, characters, visual, literary, and other IP for use on merchandise, published materials, and games; operates a direct-to-home satellite distribution platform; sells branded merchandise through retail, online, and wholesale businesses; and develops and publishes books, comic books, and magazines. The company was founded in 1923 and is based in Burbank, California.
About NetEase
NetEase, Inc. engages in online games, music streaming, online intelligent learning services, and internet content services businesses in China and internationally . The company operates through Games and Related Value-Added Services, Youdao, Cloud Music, and Innovative Businesses and Others segments. It develops and operates PC and mobile games, as well as offers games licensed from other game developers. The company's products and services include Youdao Dictionary, an online knowledge tool; Youdao Translation, a tool specifically designed to support translation needs of business and leisure travelers; U-Dictionary, an online dictionary and translation app; Youdao Kids' Dictionary, a smart and fun tool; smart devices, such as Youdao Dictionary Pen, Youdao Smart Learning Pad, Youdao Listening Pod, Youdao Smart Light, Youdao Pocket Translator, and Youdao Super Dictionary; online courses; interactive learning apps; and education digitalization solutions, such as Youdao Smart Learning Terminal, a device that automates paper-based homework processing; Youdao Smart Cloud, a cloud-based platform that allows third-party app developers, smart device brands, and manufacturers to the company's OCR capabilities; and Youdao Sports, a sports-centric educational system. Its products and services also include NetEase Cloud Music, a music streaming platform; Yanxuan, an e-commerce platform, which sells private label products; www.163.com portal and related mobile app, Wangyi Xinwen, which deliver information such as news, sports events, technology, fashion trends, and online entertainment; NetEase Mail, an email service; NetEase CC Live streaming, a live streaming platform with a focus on game broadcasting; and NetEase Pay, a payment platform. The company was formerly known as NetEase.com, Inc. and changed its name to NetEase, Inc. in March 2012. NetEase, Inc. was founded in 1997 and is headquartered in Hangzhou, the People's Republic of China.
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