Over the past three months, one of the leaders of growth in the S&P 500 index has been the entertainment industry (+28.1%).
The largest (by market capitalization) companies in this industry: Netflix ($383.7B), one of the largest streaming companies in the world with a subscriber base of more than 278 million users from 190 countries, and Walt Disney ($31.1B), an American multinational media corporation, which is currently the world’s largest media conglomerate in the entertainment industry. The company has 3 main segments: sports, franchises and media entertainment.
According to the latest quarterly reporting data, we analyzed each company’s profitability, strength, and efficiency criteria using the methodology of Stanford University professor Joseph Piotroski.
As we can see, both companies are performing quite strongly in terms of fundamentals, but Walt Disney is outperforming Netflix in terms of profitability.
Over the past 3 months, Netflix shares have risen by +7.8%, and Walt Disney by +18.0% (the S&P 500 index is up +4.6%). Netflix not only outperformed its closest competitor but also showed better results compared to the index.
So, there is no winner in this issue. Although Netflix shares show better returns, Walt Disney’s business outperforms its competitor in terms of accumulation.
* This is not an investment recommendation. It is up to each individual to decide which criteria to favor when making an investment decision, taking into account their goals and individual risk tolerance.
