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Known for extracting top dollar from its fans, Disney is set to pay a cash dividend of 30 cents per share to investors holding the entertainment giant’s stock as of the market’s close on Dec. 11. While marking the company’s first dividend payout since 2020, the offered dividend, yielding just 0.3%, falls short of significant returns.
The meager dividend positions Disney as the second-to-last lowest among S&P 500 stocks that pay a dividend, surpassing only Cooper (COO) with a 0.2% yield. This offering is notably minor for Disney investors, who have seen a mere 6.4% increase in the stock this year compared to the S&P 500’s 20% rise.
Disney’s dividend history adds context to its current offering. In 2019, the company paid a more substantial $1.76 per share (88 cents semi-annually). The dividend was suspended in January 2020 due to the pandemic, with no payouts since. Whether the recent dividend is a one-time occurrence or marks a resumption remains undisclosed by Disney.
In response to investor demands, particularly from activist investor Trian Fund Management holding 1.8% of the company, Disney opted for the dividend. However, its modest nature prompts comparisons to more lucrative alternatives.
Within the same industry, Paramount Global (PARA) yields 1.39%, and Fox (FOXA) offers 1.76%. Venturing beyond, Pioneer Natural Resources (PXD) boasts the highest S&P 500 yield at 11.9%, accompanied by a 2.6% stock gain this year. Walgreens Boots Alliance (WBA) provides a substantial 9.63% yield, albeit with a 45% decline in stock value in 2023.
For those seeking sizable dividends coupled with market-beating performance, CME Group (CME) stands out, with a 4.1% yield and a 31% stock increase this year.
In summary, while Disney’s dividend attempts to appease investors, it falls short in comparison to other S&P 500 options offering more attractive yields.
