Walt Disney (NYSE:DIS – Get Free Report) and iQIYI (NASDAQ:IQ – Get Free Report) are both communication services companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.
Profitability
This table compares Walt Disney and iQIYI’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Walt Disney | 8.70% | 9.90% | 5.63% |
| iQIYI | -3.24% | -6.29% | -1.78% |
Earnings and Valuation
This table compares Walt Disney and iQIYI”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Walt Disney | $94.42 billion | 2.03 | $12.40 billion | $4.85 | 22.88 |
| iQIYI | $3.80 billion | 0.21 | -$29.50 million | ($0.12) | -6.88 |
Walt Disney has higher revenue and earnings than iQIYI. iQIYI is trading at a lower price-to-earnings ratio than Walt Disney, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent ratings and target prices for Walt Disney and iQIYI, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Walt Disney | 0 | 3 | 17 | 1 | 2.90 |
| iQIYI | 1 | 4 | 1 | 0 | 2.00 |
Walt Disney presently has a consensus target price of $128.16, suggesting a potential upside of 15.49%. iQIYI has a consensus target price of $1.73, suggesting a potential upside of 109.52%. Given iQIYI’s higher possible upside, analysts clearly believe iQIYI is more favorable than Walt Disney.
Risk and Volatility
Walt Disney has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, iQIYI has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500.
Institutional & Insider Ownership
65.7% of Walt Disney shares are held by institutional investors. Comparatively, 52.7% of iQIYI shares are held by institutional investors. 0.2% of Walt Disney shares are held by insiders. Comparatively, 57.8% of iQIYI shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
Walt Disney beats iQIYI on 13 of the 15 factors compared between the two stocks.
About Walt Disney
The Walt Disney Company operates as an entertainment company worldwide. It operates through three segments: Entertainment, Sports, and Experiences. The company produces and distributes film and television video streaming content under the ABC Television Network, Disney, Freeform, FX, Fox, National Geographic, and Star brand television channels, as well as ABC television stations and A+E television networks; and produces original content under the ABC Signature, Disney Branded Television, FX Productions, Lucasfilm, Marvel, National Geographic Studios, Pixar, Searchlight Pictures, Twentieth Century Studios, 20th Television, and Walt Disney Pictures banners. It also offers direct-to-consumer streaming services through Disney+, Disney+ Hotstar, Hulu, and Star+; sports-related entertainment services through ESPN, ESPN on ABC, ESPN+ DTC, and Star; sale/licensing of film and episodic content to third-party television and VOD services; theatrical, home entertainment, and music distribution services; DVD and Blu-ray discs, electronic home video licenses, and VOD rental services; staging and licensing of live entertainment events; and post-production services. In addition, the company operates theme parks and resorts comprising Walt Disney World Resort, Disneyland Resort, Disneyland Paris, Hong Kong Disneyland Resort, Shanghai Disney Resort, Disney Cruise Line, Disney Vacation Club, National Geographic Expeditions, and Adventures by Disney, as well as Aulani, a Disney resort and spa in Hawaii. It also licenses its intellectual property to a third party for operations of the Tokyo Disney Resort; licenses trade names, characters, visual, literary, and other IP for use on merchandise, published materials, and games; operates a direct-to-home satellite distribution platform; sells branded merchandise through retail, online, and wholesale businesses; and develops and publishes books, comic books, and magazines. The company was founded in 1923 and is based in Burbank, California.
About iQIYI
iQIYI, Inc., together with its subsidiaries, provides online entertainment video services in the People's Republic of China. It offers various products and services, including online video, online games, online literature, animations, and other products. The company operates a platform that provides a collection of internet video content, such as professionally produced content licensed from professional content providers and self-produced content. It also offers membership, online advertising, content distribution, and live broadcasting services. In addition, the company operates iQIYI Show, a live broadcasting platform that enables users to follow their favorite hosts and shows in real time through live broadcasting; and iQIYI Lite that offers an easy and quick access to the personalized videos based on their user preferences. Further, it is involved in the talent agency and IP licensing activities, as well as engages in developing a video community app. The company was formerly known as Qiyi.com, Inc. and changed its name to iQIYI, Inc. in November 2017. iQIYI, Inc. was incorporated in 2009 and is headquartered in Beijing, China. iQIYI, Inc. is a subsidiary of Baidu, Inc.
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