Amazon.com, Inc. (AMZN)vs The Walt Disney Company (DIS)

Quick verdict

Amazon.com, Inc. (AMZN) and The Walt Disney Company (DIS) appeal to different investors. On our six-factor framework, AMZN scores 2 and DIS scores 4. DIS looks cheaper on the multiples that matter, while DIS grows faster and AMZN earns higher returns on capital. Overall, DIS edges this comparison, but the right pick depends on whether you prioritise value, growth, income or balance-sheet safety.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

Amazon.com, Inc. operates in Specialty Retail (Consumer Cyclical), while The Walt Disney Company sits in Entertainment (Communication Services). The two operate in different sectors, so cyclicality and end-market exposure differ — factor that into any portfolio overlap. AMZN carries a beta of 1.46 versus 1.40 for DIS, meaning AMZN has historically been the more volatile of the two.

Valuation

On valuation, DIS is the cheaper stock. AMZN trades on a forward P/E of 45.95 and EV/EBITDA of 12.07, against n/a and 10.64 for DIS. Price-to-sales is 3.77 vs 1.72, and free-cash-flow yield is 2.0% vs 6.1%. A higher multiple is only justified if the company can sustain faster growth or wider margins, which is exactly what the next sections test.

Growth profile

DIS is the faster grower. AMZN has compounded revenue at 12.4% over three years with EPS growth of 28.8%, while DIS has delivered 3.4% revenue and 152.9% EPS growth. Growth like this is the single biggest driver of long-term returns, but it also tends to come with a richer valuation, so it must be weighed against the multiples above.

Profitability and quality

On profitability and quality, AMZN is stronger. AMZN posts a 12.1% operating margin, 30.5% return on equity and 8.5% return on invested capital. DIS posts 14.3%, 10.3% and 7.8% respectively. Return on invested capital above roughly 15% is a hallmark of a durable competitive advantage, so this metric deserves particular attention.

Balance-sheet risk

AMZN has the safer balance sheet. AMZN carries net-debt/EBITDA of 0.86x with a current ratio of 1.03, versus 1.09x and 0.65 for DIS. Lower leverage gives a company more room to invest through a downturn and reduces the risk of dilution or distress.

Price performance and shareholder returns

Over the past year AMZN returned 4.0% against 120.0% for DIS; on a three-year annualised basis it is 42.8% vs 45.5%. AMZN yields 0.0% and DIS yields 1.6%. Past performance never guarantees future results, but the multi-year track record shows how the market has rewarded each business so far.

Which stock fits which investor

For value-oriented investors, DIS is the better fit on today's multiples. Growth investors will likely prefer DIS, which is expanding faster. Income investors should lean toward DIS for its higher shareholder yield, while investors who prize quality-at-a-reasonable-price will favour AMZN for its superior returns on capital. This is a comparison of facts, not a recommendation — your time horizon, risk tolerance and existing holdings should drive the final decision.

• Value: DIS
• Growth: DIS
• Income: DIS
• Quality: AMZN

Frequently asked questions

Is AMZN or DIS the better buy right now?

Neither is universally "better." AMZN scores 2 and DIS scores 4 on our six-factor framework. DIS is cheaper, DIS grows faster, and AMZN is higher quality — so the right pick depends on your objective.

Which stock is cheaper, AMZN or DIS?

DIS is the cheaper stock across forward P/E (45.95 vs n/a), EV/EBITDA (12.07 vs 10.64) and price-to-sales (3.77 vs 1.72).

Which has grown faster, AMZN or DIS?

DIS has the stronger growth profile, with three-year revenue CAGR of 12.4% for AMZN versus 3.4% for DIS.

Which stock pays a bigger dividend?

AMZN yields 0.0% and DIS yields 1.6%, so DIS is the stronger income choice.

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