• Trading View

We’re Bullish on These Entertainment Stocks

Hassan Maishera - December 19, 2019

entertainment stocks

Quality entertainment is a crucial need for a widely overworked, underpaid population. Movies, games, and other forms of entertainment allow users to decompress and have a little fun. This diverse industry intersects with various subsectors, such as amusement parks, video games, and more. To pick the best entertainment stocks, investors need to have the fingers on the pulse of consumers. However, that’s easier said than done.

Consumers constantly search for fresh, original entertainment, so amusement stocks are an eclectic bunch. Here, we will discuss some well-positioned stocks in the sector and why they are the best. Grab some popcorn because these entertainment stocks are worth watching.

Netflix Inc. (NFLX)

Netflix is an American multinational media-services provider and production company based in California. The firm is best known as the number one streaming service on the planet. Over the past few years, Netflix has been one of the best-performing stocks in the S&P.

Netflix revolutionized the way we watch TV. Streaming is rapidly becoming the most popular way to consume media. Netflix has a global audience with over 150 million subscribers. However, the US remains its largest market with over 60 million subscribers.

entertainment stocks - netflix
Netflix maintains a strong lead in the streaming media market, despite heated competition from rivals like Disney.

150 million subscribers add up to a lot of subscription revenues. Netflix generates billions of dollars in annual revenue from its streaming services, making it one of the richest entertainment companies in the world. Recently, Netflix has shifted its focus towards producing original movies and TV series.

More original content could attract more subscribers to the platform. In fact, Netflix has to come up with some winning franchises if it wants to keep up with content-rich Disney, NBC, and other streaming platforms. The competition is getting fierce for Netflix, but it’s still the market leader. If it can keep its subscribers engaged with original content, it could be the leading streaming stock for years to come.

Walt Disney Company (DIS

Walt Disney Company is the world’s premier media conglomerate. It has a massive content library that includes billions of dollars in intellectual property assets alone. After a recent spree of acquisitions and expansions, Disney is stronger than ever. Disney appears destined to perform incredibly well in the near future.

Disney recently closed its acquisition of 21st Century Fox for $71 billion, and the deal turned the already-strong Disney content portfolio into an absolute powerhouse. The company now owns Fox’s film and TV studios, including the FX networks, National Geographic and Star India. After the Fox deal, Disney now controls the entire Marvel Universe, The Simpsons, and other popular franchises. Now, Disney is well equipped to take on Netflix and Amazon for the streaming throne.

Currently, Disney+ is the company’s most important undertaking. The streaming platform received a strong reception from fans upon launch, but the long-term viability of the product remains unclear. In just a few months, Disney+already has more than 10 million subscribers. Company projections say Disney+ will grow to include 60 million to 90 million global subscribers over the next five years.

Even if Disney hits those targets, it would fall well short of the Netflix subscriber count. However, that number of subscribers is still enough to make Disney one of the leading streaming platforms in the world. It remains to be seen whether Disney+ can hit those lofty goals but, if it does, it could power the stock to significant gains for years to come.

Sony Corp (SNE)

This Japanese conglomerate has an extremely diverse set of assets that includes movies, games, music, electrical components, and more. The company is one of the largest entertainment companies in the world, and it will likely maintain its position over the coming years.

Sony film studios have been on an epic hot streak lately. The newest Jumanji release smashed the weekend box office, and many of its other movies performed well too. Over the next few years, it has several hits coming down the pipeline, including Life, Peter Rabbit 2, Bloodshot, Ghostbusters: Afterlife, Escape Room 2, Venom 2, Cinderella, and a Spiderman sequel. The acquisition of Silvergate Media Holdings Ltd will also help Sony bolster its movie business.

In the music section, Sony remains one of the largest record labels in the world, generating billions of dollars from recorded music and other distribution channels. Its streaming service can’t touch Spotify or Apple Music, but it generates substantial revenues for the company.

While the PS4 remains one of the best gaming consoles in the world, Sony will launch the PS5 console soon. The PS5 boasts several unique features that will make it a worthy addition to the Playstation lineage. When the next-gen gaming console is released, it could create significant revenues for the company.

Sony’s widely exposed to the entertainment sector, so it could be a great way to make a macro play on the entertainment sector. It’s one of the leading entertainment stocks and it’s likely to remain so for years to come.

ViacomCBS (VIAC)

ViacomCBS is an American multinational media conglomerate that has been around for a while. The company is known for commercial broadcasting, publishing, and television production. It is one of the largest media houses in the US.

The joining together of Viacom and CBS once again could bolster the company over the coming years. The two companies first merged in 1999 before they broke apart in 2005. However, they are back together, with the company now known as ViacomCBS.

With Viacom now a part of CBS, it brings channels such as BET, Comedy Central, MTV, and the movie studio Paramount to the fold. This would be in addition to the Showtime, CBS Television Network, CBS News, and other 15 CBS-owned TV stations.

The streaming platforms of CBS, CBS All Access, and Showtime have seen a substantial increase in subscribers over the past year. The company has over 8 million subscribers on its streaming platforms. They aim to reach 25 million subscribers by 2022. The merger with Viacom could see the company reach eclipse that figure over the next two years.

AT&T – Time Warner (T)

Warner Media is the entertainment wing of American telecom giant AT&T. Based in New York, it’s one of the largest entertainment companies on the market. It has extensive global reach and boasts fantastic networks such as HBO.

The company is joining other leading movie production houses to launch a streaming platform. Warner Media unveiled its streaming platform, HBO Max, in October 2019. HBO Max debuts in May 2020 and the company expects to reach 75 million to 90 million subscribers by 2025.

HBO Max has a long way to go before it can catch up with Netflix and Amazon Prime, who currently lead the market. However, signing that many subscribers would give HBO Max large portion of the market.

Warner Media’s 2020-2021 movie line up could power the stock to more long-term gains. Some of these movies include Wonder Woman 1984, Godzilla vs. Kong, and more. Time Warner’s content properties include DC Comics, New Line Cinema, The CW, and other brands. The company’s vast content portfolio could help it compete in the streaming market.

Discovery Communications Inc. (DISCA)

Discovery Communications Inc. is an American media company headquartered in New York. The company has been around since 1985, and it’s best known for its documentaries and reality TV. Discovery appeals to highly engaged audiences, and its top brands include Discovery Education, HGTV, TLC, Eurosport, and others.

The company generates billions of dollars in revenue annually, making it one of the largest entertainment companies in the world. In addition, Discovery Communications made several acquisitions to boost its content production over the past few years. It’s $15 billion acquisition of Scripps is one of the most notable, and it allowed the company to add Food Network, Travel Channel, and HGTV to its media portfolio.

While the other big media companies are entering the streaming sector, Discovery Communications is yet to make a move. The company wants to continue producing unique content that differentiates it from other brands. They are focusing on developing great personalities, different content, and excellent brands.

Their focus on unique and different content could increase their global standing and boost sales over the coming years. While it would be tough to differ from the others, this business model sets Discovery Communications apart from the others.

When Discovery Communications ventures into the streaming war, the company believes it could gain a competitive advantage because all other media houses are focusing on scripted movies and TV shows.

SeaWorld Entertainment Inc. (SEAS)

SeaWorld is one of the most extensive family-friendly entertainment, amusement park, and attraction companies in the world. The Orlando-based company operates several theme parks in the United States.

Some of the brands under this company include; SeaWorld Orlando, Discovery Cove, Aquatica San Antonio, Busch Gardens Williamsburg, Sesame Place, Discovery Point, and more. SeaWorld generates billions of dollars in revenue annually and records over 20 million visitors during that period.

The revenue and attendance numbers at SeaWorld continue to grow, and this could be a catalyst for stock growth. If the company could keep up the numbers, then it could experience massive growth over the coming years.

Comcast Corp (CMCSA)

Comcast is a Philadelphia-based telecommunications conglomerate. It is one of the largest broadcasting and cable television companies in the world, generating billions of dollars in revenue annually. Comcast owns NBCUniversal since 2011, allowing it to boost its feature films and TV programs.

Comcast is known for its traditional cable television services. It has over 20 million subscribers in the United States, enabling it to generate billions of TV revenue. However, the number of cable subscribers have been declining. This could be due to the emergence of movie streaming.

entertainment stocks | comcast
Comcast is a vast telecommunications conglomerate that offers high-speed internet, cable, and more. Plus, they own NBC and other media assets.

To tackle that, Comcast is looking to launch its streaming platform. NBCUniversal’s new Peacock streaming service could be launched next year as the company pushes to enter the sector. It is unclear how the platform would operate, but the details would be revealed by January 2020.

Comcast’s entry into the streaming sector could help keep its subscription numbers up. It could also help Comcast retain its place as the second-largest broadcasting company in the world.

Entertainment Stocks: Our Best Picks

Entertainment continues to be a significant part of our lives. For investors, the growth in the entertainment sector has been impressive as it means more money for them. However, as an ever-changing sector, it is great to know the stocks that could perform well over the coming years. The following entertainment stocks have the potential to bring in high returns to investors.

Entertainment Stocks: Understanding the Industry

The entertainment industry is an ever-changing one. Traditional cable subscriptions are being replaced by streaming services. Music streaming is replacing CDs and MP3s. Even gaming is shifting towards streaming and freemium pricing models. All these changes have affected the performance of various entertainment stocks.  Video streaming could earn over $30 billion byy2024. User penetration could reach 16% over the next four years.

The music streaming industry is also set to record massive growth over the coming years. Overall, the entertainment industry could continue to grow and evolve over the next few years.

Entertainment Stocks: Closing Thoughts

Entertainment stocks have been performing well over the past few years. Technological innovations helped power significant growth in the industry. The sector is mostly dominated by the movie, music, and video game industries. However, amusement parks can still be successful businesses. The entertainment industry will continue to involve, but we can be sure that entertainment stocks are going to be around for many years to come.

If you’re ready to to go beyond entertain stocks, then sign up for Stock Dock Alerts. We provide a steady stream of stock market news and analysis that will help keep you informed on everything happening in the world of Wall Street. Plus, our reports are written in plain English, so they’re easy to understand. After just a few weeks reading Dork Alerts, you’ll sound like the smartest guy at the water cooler. Sign up today and get a jump on the New Year with our 2020 Growth Stock Guide, it’s yours free when you join. Click here to join and claim your free copy now.

Hassan Maishera is a cryptocurrency expert and a Stock Dork freelance contibutor.

One thought on “We’re Bullish on These Entertainment Stocks

  1. Clinton Ralph Wensley says:

    I am a part of NOAH Holdings. I would be very cautious with this stock as all of their clubs have been closed since January 23rd and no reopening date seen

Leave a Reply

Your email address will not be published. Required fields are marked *