The entertainment company started by Walt Disney will have its 100th birthday in 2023. They don’t just make animated movies now. Disney has control of many very valuable franchises such as Star Wars and the majority of the Marvel Universe. They run cruise ships, have theme parks, have their Disney+ streaming service, and all of the merchandising for their intellectual property adds value. Because of its long history, Disney stock with the symbol DIS is quite desirable, and we have had many clients ask us if Disney pays a dividend.
Does Disney Pay Stock Dividends?
Over the years, Disney has paid a dividend; however, the last dividend Disney paid was in December of 2019. It was for $0.88, and this Semi-annual dividend resulted in a yield of 1.2%.
Because of the timing, it is obvious that the dividend was canceled due to the Covid pandemic that reduced travel and leisure activities, dramatically affecting Disney’s cash position.
The most recent discussion about the dividend was during the September 2021 Goldman Sachs Communacopia Conference, when Bob Chapek, Disney’s CEO, was asked about the resumption of the dividend, he replied:
“We’re not going to entertain doing that,” until the company’s credit rating and cash flows improve. “The clear priority is funding our new growth businesses that we’ve got.”Bob Chapek , CEO, Disney
The growth business he is speaking of is the streaming service Disney+. With this statement, we can answer the question:
When will Disney next pay dividends?
This is unknown, but not soon.
Disney’s Dividend History
This last dividend of December 2019 ended a trend of paying two dividends a year, which started in 2015. There are situations prior to 2015 where Disney has chosen to both provide an annual dividend and a quarterly one.
This volatile history of dividend-paying indicates that Disney’s dividends are very inconsistent. Any investor in Disney should not expect to see a dividend in the near term and should use Disney stock as a recovery bet coming out of the COVID pandemic.
Over the past year, Disney has fallen from its 52 week high of over $200, by nearly 28%, to its current price of $145. Because its structure relies heavily on visitors to their theme parks, taking cruises, going to movie theaters, and buying merchandise, Disney has been hurt through the extended COVID pandemic. This will continue until the new dawn is seen. Once the recovery happens, the mouse has many weapons to take full advantage of its opportunity.
(post authored by Stephen Masters)