Do you ever think about which of today's companies will be
around a century from now?
You'd be looking for a company that has a strong enough
business to survive no matter what. Whether there's war,
depression or natural disasters, you want a company with the
resilience to withstand whatever comes its way.
To identify this type of investment, you have to be a
Or Steve Jobs.
Jobs is no longer with us, but he had the same foresight when
it comes to investing his fortune as he did with
While Jobs was the visionary behind the iMac, iPod and iPhone,
represented only a portion of his portfolio. The bulk of Jobs'
fortune was in
The Walt Disney Co. (NYSE:
After Jobs' passing, many had expected his widow, Laurene
Powell Jobs, to sell the family's 7% stake in Disney. However,
she has not sold a single share. It appears she's confident in
the company's long-term future, and rightfully so -- Disney is a
DIS is up more than 33% over the past year, compared with the
S&P 500's gain of just over 16%. Powell Jobs' stake is now
worth over $10 billion. And over the past decade, Disney's stock
has outperformed the S&P 500 by more than 200 percentage
Disney is a great investment for the long term because the
company is heavily diversified. It owns theme parks with hotels
and golf courses, media networks, film studios, Disney consumer
products and an interactive division for its Internet
While Disney may be best known for its characters and theme
parks, the ESPN sports network is the prime growth driver for the
company. In the most recent quarter, ESPN drove the 15% increase
in operating income for Disney's cable networks division.
Disney's media networks accounted for $2.1 billion of its $3.3
billion in operating income during the quarter.
Part of what makes Disney such a compelling long-term
investment is that the company owns and distributes its own
content, which includes not only Disney's own well-known
characters but also characters from Marvel, Jim Henson's Muppets,
Pixar and now Star Wars. CEO Bob Iger has said his goal is to
"buy either new characters or businesses that are capable of
creating great characters and great stories."
By owning its characters, Disney is able to make money across
all of its properties: The company can use its characters in
films, at its theme parks, on Broadway, and in related
Disney also has a history of delivering superior results for
its shareholders. Since Disney went public in 1957, its shares
have risen at an annualized rate of 14%.
One of the prime reasons for Disney's success is that the
company has had only six CEOs in its 91-year history. The company
has shown great stability in its long history, and this is a
critical factor for a successful long-term investment.
Risks to Consider:
A hundred years is a long time. While Disney owns an
impressive collection of assets and is now run by a great
management team, future management teams might not do as well.
This happened to Disney before Michael Eisner took over as CEO in
1984. A number of box-office failures had led to a reshuffling of
Disney's board and management. A lot will depend on Iger's
Action to take -->
Buy DIS and hang on to it for the next 100 years. Along the way,
you'll also collect a 1% dividend yield, which is only a 22%
payout of earnings. This gives Disney plenty of room to increase
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