Is Apple or Disney a Better Stock?

By Quinlan Grim

March 7, 2023

MicroStockHub / iStock.com

Apple and Disney are both huge players in the entertainment sector — and both took a hit when theaters and theme parks shut down during the COVID-19 pandemic, but now are on the rise again. 

See: 3 Things You Must Do When Your Savings Reach $50,000

The question is: when it comes to Apple vs. Disney stock, which is the smarter investment? This guide will walk you through the pros and cons of Disney and Apple stock to help you decide which is a better buy. 

Disney Overview

There’s no denying that Disney had a tough couple of years after the COVID-19 pandemic. But the emergence of its streaming platform, Disney+, has helped to boost Disney’s net worth.

Disney’s stock peaked in early 2021 before declining again through 2022. The company invested heavily in its streaming service last year — around $30 billion. That investment, plus the growing revenue from parks and box office hits like “Avatar: The Way of Water”, should lead to steady growth in Disney’s value over the next year.

But the fact remains that Disney has had a volatile couple of years. Its free cash flow as of the end of 2022 was a little over $2 billion — a significant increase from the start of the year, but still much lower than Apple’s.

Apple Overview

Apple stock is famously reliable. As a leader in the tech and entertainment sectors, this company has seen consistent upward growth for the past ten years. Apple’s net worth at the end of 2022 was around $50.67 billion, and it’s expected to continue gaining value with the increasing popularity of its streaming platform and the launch of the iPhone 15 later this year.

In terms of market capitalization, Apple is the largest company in the world. But where it really stands out from Disney is its free cash flow. At the end of 2022, Apple’s free cash flow was over $30 billion.

Apple vs Disney Stock

When comparing Apple and Disney stock, there are a few factors to consider.

Decline in 2022

The stock market took a hit in 2022. S&P market capitalization declined by around $8 billion over the course of the year, the worst annual drop since 2008.

• Disney’s stock fell nearly 44% in 2022.
• Apple’s stock fell 27% in 2022.

Many different factors caused these drops in 2022, which means you shouldn’t base your decision on these declines alone. However, these statistics show Apple is a little more resilient in times of economic downturn.

Price-to-Earnings Ratio

The price-to-earnings ratio is a metric used to compare stocks. Generally speaking, a lower P/E ratio means you’re getting more value out of that stock.

• Disney’s current P/E ratio is 29.23.
• Apple’s current P/E ratio is 25.64.

Remember, the P/E ratio isn’t the only way to value a stock. But this is one more factor that shows Apple is a slightly smarter buy than Disney in 2023.

Analyst Forecasts

When in doubt, go to the experts. Apple and Disney stock are nearly neck and neck as far as the analysts polled by Yahoo Finance are reporting — both have “buy” consensus ratings, but there is a little more nuance to it.

• Apple stock is being watched by 38 analysts in March; of those, 11 give it a strong buy rating, 21 give it a buy rating and 6 say to hold the stock.
• Disney stock is being watched by 30 analysts in March; 5 give it a strong buy rating, 10 give it a buy rating, 12 give it a hold rating, two say it’s underperforming and one recommends selling.

Again, Disney comes out just a little behind Apple, even though they both have buy ratings.

Final Take

Here’s the reality: neither of these stocks is a bad buy. Both Apple and Disney make it to GoBankingRate’s list of the top 10 stocks set to soar in 2023. That said, if you can only invest in one of these companies, Apple is more reliable and currently a better value than Disney.

Amber Barkley contributed to the reporting for this article.

Information is accurate as of March 6, 2023, and is subject to change.

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