EARNINGS PER SHARE OF THE WALT DISNEY COMPANY
- Slides: 10
EARNINGS PER SHARE OF THE WALT DISNEY COMPANY 2004 -2015 By Ms. Russell
Why Disney? ◦ I LOVE Disney World…. A lot ◦ So much, that I think I should buy stock in Disney World, since I spend a lot of money there anyways ◦ I want to see how much return I can expect on my investment, if I were to buy Disney stock
Earnings per share of the Walt Disney Company 2004 -2015 Actual Return Year 2004 $ 1. 07 2005 2006 $ 1. 22 $ 1. 65 2007 $ 2. 33 2008 $ 2. 34 2009 $ 1. 78 2010 $ 2. 07 2011 $ 2. 56 2012 $ 3. 17 2013 $ 3. 42 2014 $ 4. 31 2015 $ 4. 95
Earnings per share of the Walt Disney Company 2004 -2015 $ 6. 00 Amount of Return $ 5. 00 $ 4. 00 $ 3. 00 Actual Return $ 2. 00 $ 1. 00 $2002 2004 2006 2008 2010 Year 2012 2014 2016
Earnings per share of the Walt Disney Company 2004 -2015 $ 6. 00 R 2 = 0. 8641 Amount of Return $ 5. 00 $ 4. 00 $ 3. 00 Actual Return $ 2. 00 $ 1. 00 $2002 2004 2006 2008 2010 Year 2012 2014 2016
Earnings per share of the Walt Disney Company 2004 -2015 Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Actual Return $ $ $ 1. 07 1. 22 1. 65 2. 33 2. 34 1. 78 2. 07 2. 56 3. 17 3. 42 4. 31 4. 95 Predicted Return $ 0. 88 $ 1. 19 $ 1. 50 $ 1. 80 $ 2. 11 $ 2. 42 $ 2. 73 $ 3. 04 $ 3. 34 $ 3. 65 $ 3. 96 $ 4. 27 Residual $ 0. 19 $ 0. 03 $ 0. 15 $ 0. 53 $ 0. 23 $ (0. 64) $ (0. 66) $ (0. 48) $ (0. 17) $ (0. 23) $ 0. 35 $ 0. 68
The Regression ◦ y = 0. 3078 x - 615. 95 ◦ R² = 0. 8641 ◦ The regression line tells us that for every additional year that I hold the stock (I don’t sell it), that I can expect a $0. 31 return on my money, per share of stock I own ◦ The R 2 tell me that 86. 41% of the variability in my stock return, can be explained by the model ◦ 13. 58% is explained by other variables, such as a recession, and new major Disney attraction opening or a disaster at a Theme Park
Conclusion ◦ In conclusion, while there is a strong, positive correlation between the year and earnings per share, I may want to reconsider purchasing Disney Stock. ◦ Since I can only expect an additional $0. 31 per share (pulled from the regression line equation), I may want to purchase stock in a company with a higher return.
Conclusion ◦ Upon further research, I discovered that I would receive much more earnings per share with the following stocks, instead of Disney: ◦ Auto Zone - $40. 70 ◦ Google - $25. 81 ◦ American Airlines - $10. 59
Conclusion ◦ I’ll still be visiting Disney World every year…. ◦ …. but won’t be a share holder