Apple Inc. (AAPL)vs The Walt Disney Company (DIS)

Quick verdict

Apple (AAPL) and Disney (DIS) sit in different valuation and profitability brackets. Apple trades on a trailing P/E of 39.4 versus Disney's 15.4, and a P/S of 10.63 versus 1.72, reflecting Apple's superior margins: 32.64% operating margin and 27.15% net margin against Disney's 14.3% and 11.54%. Apple's ROE of 146.69% and ROIC of 49.57% dwarf Disney's 10.29% and 7.82%, supporting Apple's overall quality verdict of A versus Disney's implied lower quality standing. Disney's forward P/E of 23.87 is actually higher than its trailing figure, while Apple's forward P/E of 26.84 is lower than trailing, suggesting differing near-term earnings expectations. Both score B on valuation and growth overall, with Apple rated A on quality, balance sheet, and momentum, while Disney carries a 'mature' style tag against Apple's 'high-quality' tag.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

Apple designs, manufactures and sells consumer electronics and related services globally, operating from a Consumer Electronics industry base within Technology. Disney operates across two segments: Media and Entertainment Distribution, and Parks, Experiences and Products, placing it in Entertainment within Communication Services. Apple's model centres on hardware sales supplemented by services, evidenced by a gross margin of 47.86%. Disney's diversified model spans content, streaming and physical parks, reflected in a lower gross margin of 37.16%. Apple's beta of 1.097 indicates volatility close to the broader market, while Disney's higher beta of 1.398 points to greater sensitivity to market swings, consistent with its more cyclical, experience-driven revenue streams.

Valuation

On trailing multiples, Disney appears cheaper across the board: P/E of 15.4 versus Apple's 39.4, P/S of 1.72 versus 10.63, and P/B of 1.57 versus Apple's 45.12. However, Disney's forward P/E of 23.87 rises above its trailing figure, while Apple's forward P/E of 26.84 falls below trailing, implying the market expects earnings growth to narrow the gap from opposite directions. Disney's PEG ratio of 0.56 is notably lower than Apple's 1.36, suggesting its valuation is more supported by expected growth. Apple's EV/EBITDA of 30.22 is nearly triple Disney's 10.65. Apple's FCF yield of 3.57% trails Disney's 5.6%, indicating Disney generates more free cash flow relative to its market value at current pricing. Both carry a B valuation verdict overall.

Growth profile

Apple shows stronger recent revenue momentum with a 5-year revenue CAGR of 29.32% versus Disney's 16.4%, though 3-year revenue CAGR is closer, with Apple at 6.43% against Disney's 3.35%. On earnings, Disney's 3-year EPS CAGR of 152.94% far exceeds Apple's 22.59%, likely reflecting a low or depressed earnings base being recovered from, while Apple's 5-year EPS CAGR of 39.1% outpaces Disney's 10.11%. This mixed picture across timeframes explains why both companies share a B growth verdict, with each showing strength in different growth metrics and periods rather than one being uniformly superior.

Profitability and quality

Apple demonstrates markedly stronger profitability across every measure: gross margin of 47.86% versus Disney's 37.16%, operating margin of 32.64% versus 14.3%, and net margin of 27.15% versus 11.54%. Return metrics show an even wider gap, with Apple's ROE of 146.69% and ROIC of 49.57% far exceeding Disney's 10.29% and 7.82% respectively. These figures align with Apple's A quality verdict against Disney's comparatively lower profitability profile, reinforcing Apple's positioning as the higher-quality, more efficient operator of the two on a returns-on-capital basis.

Balance-sheet risk

Apple holds cash of approximately $67.9 billion against total debt of $76.2 billion, with a net debt/EBITDA of -1.5 indicating a net cash position relative to earnings. Its current ratio stands at 1.07 and interest coverage at 3.19. Disney holds a larger cash pile of roughly $80.8 billion against lower total debt of $51.3 billion, but carries a net debt/EBITDA of 1.76, a current ratio of just 0.65, and substantially stronger interest coverage of 32.38. Apple's balance sheet earns an A verdict overall, while Disney's lower current ratio suggests tighter short-term liquidity despite its high interest coverage.

Price performance and shareholder returns

Apple has delivered stronger recent share price performance, with a year-to-date return of 58.09% and a 1-year return of 73.53%, compared with Disney's 49.56% and -9.43% respectively. Over 3 years annualised, Apple's 27.16% is close to Disney's 24.93%, but over 5 years annualised Apple shows -0.6% versus Disney's 31.97%, indicating Disney's longer-term trend has been more favourable. Apple's maximum 5-year drawdown of -19.47% is considerably shallower than Disney's -43.71%, pointing to lower historical volatility in downside moves, consistent with Apple's A momentum verdict.

Which stock fits which investor

Apple, tagged high-quality with an A verdict on quality and balance sheet, may suit investors prioritising profitability, capital efficiency, and steadier drawdowns, as reflected in its ROE of 146.69% and maximum drawdown of -19.47%. Disney, tagged mature, is flagged as best for value and growth-oriented and income-focused investors, supported by its lower PEG of 0.56 and dividend yield of 1.56% versus Apple's 0.32%. Those focused on quality characteristics are directed toward Apple, per the supplied verdict data.

• Value: DIS
• Growth: DIS
• Income: DIS
• Quality: AAPL

Frequently asked questions

Which stock has the higher valuation, AAPL or DIS?

Apple trades at higher valuation multiples than Disney, including a trailing P/E of 39.4 versus 15.4 and a P/S of 10.63 versus 1.72. Both nonetheless carry the same overall valuation verdict of B.

Which company is more profitable?

Apple shows stronger profitability across all measured metrics, with a net margin of 27.15% versus Disney's 11.54% and ROE of 146.69% versus Disney's 10.29%.

Which stock has performed better recently?

Apple's 1-year return of 73.53% outpaces Disney's -9.43%, though over 5 years annualised, Disney's 31.97% is stronger than Apple's -0.6%.

Which company carries more balance sheet risk?

Disney has a lower current ratio of 0.65 versus Apple's 1.07, and positive net debt/EBITDA of 1.76 versus Apple's -1.5, though Disney's interest coverage of 32.38 is far higher than Apple's 3.19.

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