Roku (NYSE: DIS) and Walt Disney (NYSE:DIS) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, analyst recommendations and risk.

Dividends

Walt Disney pays an annual dividend of $1.68 per share and has a dividend yield of 1.5%. Roku does not pay a dividend. Walt Disney pays out 29.5% of its earnings in the form of a dividend.

Profitability

This table compares Roku and Walt Disney’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Roku -7.49% -60.24% -13.56%
Walt Disney 20.76% 21.37% 10.45%

Earnings and Valuation

This table compares Roku and Walt Disney’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Roku $512.76 million 13.49 -$63.50 million ($2.24) -29.12
Walt Disney $55.14 billion 2.99 $8.98 billion $5.70 19.47

Walt Disney has higher revenue and earnings than Roku. Roku is trading at a lower price-to-earnings ratio than Walt Disney, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

33.7% of Roku shares are held by institutional investors. Comparatively, 67.6% of Walt Disney shares are held by institutional investors. 0.6% of Roku shares are held by insiders. Comparatively, 0.4% of Walt Disney shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for Roku and Walt Disney, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Roku 0 6 7 0 2.54
Walt Disney 2 9 12 0 2.43

Roku currently has a consensus target price of $53.50, suggesting a potential downside of 17.98%. Walt Disney has a consensus target price of $118.52, suggesting a potential upside of 6.81%. Given Walt Disney’s higher probable upside, analysts plainly believe Walt Disney is more favorable than Roku.

Summary

Walt Disney beats Roku on 10 of the 14 factors compared between the two stocks.

About Roku

Roku, Inc. operates a TV streaming platform. The company operates in two segments, Player and Platform. Its platform allows users to search, discover, and access approximately 500,000 movies and TV episodes, as well as live sports, music, news, and others. As of December 31, 2017, the company had 19.3 million active accounts. It also provides advertising products, including videos ads, interactive video ads, audience development promotions, and brand sponsorships; and manufactures, sells, and licenses TVs under the Roku TV name. In addition, the company offers streaming media players and accessories under the Roku brand that allow users to access its TV streaming platform; and sells branded channel buttons on remote controls. It provides its products and services through retailers and distributors, as well as directly to customers through its Website in the United States, Canada, the United Kingdom, France, the Republic of Ireland, and various Latin American countries. The company was founded in 2002 and is headquartered in Los Gatos, California.

About Walt Disney

The Walt Disney Company, together with its subsidiaries, operates as an entertainment company worldwide. The company's Media Networks segment operates cable programming services under the brand ESPN, Disney, and Freeform; broadcast businesses, which include the ABC TV Network and eight owned television stations; radio businesses consisting of the ESPN Radio network; and the Radio Disney network. It also produces and sells original live-action and animated television programming to first-run syndication and other television markets, as well as subscription video on demand services and in home entertainment formats, such as DVD, Blu-Ray, and electric home video license. Its Parks and Resorts segment owns and operates the Walt Disney World Resort in Florida and the Disneyland Resort in California. This segment also operates Disney Resort & Spa in Hawaii, Disney Vacation Club, Disney Cruise Line, and Adventures by Disney; and manages Disneyland Paris, Hong Kong Disneyland Resort, and Shanghai Disney Resort, as well as licenses its intellectual property to a third party for the operations of the Tokyo Disney Resort in Japan. The company's Studio Entertainment segment produces and acquires live-action and animated motion pictures for distribution in the theatrical, home entertainment, and television markets primarily under the Walt Disney Pictures, Pixar, Marvel, Lucasfilm, and Touchstone banners. This segment also produces stage plays and musical recordings; licenses and produces live entertainment events; and provides visual and audio effects, and other post-production services. Its Consumer Products & Interactive Media segment licenses its trade names, characters, and visual and literary properties; develops and publishes mobile games; and sells its products through The Disney Store, shopDisney.com, and shop.Marvel.com, as well as directly to retailers. The company was founded in 1923 and is based in Burbank, California.

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