Netflix, Inc. (NFLX)vs The Walt Disney Company (DIS)

Quick verdict

The widest gap between these two entertainment names is the return they earn on the capital they employ. Netflix converted its asset base into a 33.6% return on invested capital and a 49.5% return on equity in the twelve months to June 2026; Disney managed 8.8% and 7.9% respectively in the twelve months to June 2026. That difference runs through almost everything else — margins, multiples and balance-sheet flexibility. Yet the scoreboard here favours Disney on points, 4 to 2, because the market already prices the quality gap: at the 4 September 2026 close Netflix traded at 10.8 times book and 22.5 times EV/EBITDA, against 1.7 times book and 9.4 times for Disney. Valuation and income go to Disney; growth, quality, balance sheet and momentum are all judged too close to call. Netflix carries the high-quality tag, Disney the mature one.

At-a-glance comparison

Business model and revenue mix

Subscription video is Netflix's whole business: a streaming service with an advertising tier, funded by producing and licensing films and series, generating $48.4bn of revenue in the twelve months to June 2026. Disney is a far broader entertainment group — Disney+ and Hulu streaming, theme parks and cruises, film studios and television networks including ESPN — and recorded $98.9bn of revenue in the twelve months to June 2026, roughly twice Netflix's scale. Both sit in Communication Services and the Entertainment industry, and both report a genuine operating-income line, so the margin figures below are as filed rather than derived. The structural contrast matters: Netflix's capital sits largely in content, while Disney also funds parks, ships and networks, which shows up in a shareholders' equity base of $110.0bn against Netflix's $30.2bn.

Valuation

On the multiples our data holds, Disney takes this factor. At the 4 September 2026 close Disney traded on 1.8 times sales, 1.7 times book and 9.4 times EV/EBITDA, with a trailing P/E of 21.7 and a PEG of 0.37. Netflix's price of $78.25 put it on 6.7 times sales, 10.8 times book and 22.5 times EV/EBITDA — more than double Disney's enterprise multiple — though its trailing P/E of 24.6 is only modestly higher, reflecting how much more of each sales dollar reaches the bottom line. Free cash flow yields sit closer together: 4.6% at Disney versus 3.4% at Netflix. Market capitalisations were $325.8bn and $181.8bn respectively. The question the multiples pose is whether Netflix's returns justify a book multiple roughly six times Disney's.

Growth profile

Neither company clearly outgrows the other on our measures, and the growth verdict is a tie. Netflix compounded revenue at 12.6% a year over the three years to fiscal 2025 from a fiscal 2022 base, and at 12.6% over five years from fiscal 2020 — an unusually steady pair of figures. Disney's revenue growth is slower and less consistent: 4.5% a year over three years from fiscal 2022, and 7.6% over five years from fiscal 2020, the longer figure flattered by a pandemic-affected starting point for parks and studios. Disney's earnings per share compounded at 58.5% a year over the three years to fiscal 2025, but that too starts from a depressed fiscal 2022 base and should not be read as a run rate. Equivalent EPS growth figures are not available for Netflix.

Profitability and quality

Margins are where the two businesses diverge most plainly, even though the quality verdict lands as a tie. Netflix reported a 49.1% gross margin, a 29.7% operating margin and a 28.2% net margin in the twelve months to June 2026, turning $48.4bn of revenue into $13.6bn of net income and $11.2bn of free cash flow. Disney's operating margin of 18.5% and net margin of 8.7% converted nearly twice the revenue, $98.9bn, into $8.6bn of net income and $8.3bn of free cash flow. Operating profit of $18.2bn at Disney actually exceeds Netflix's $14.4bn; the gap closes below the operating line. A gross margin is not available for Disney, which limits the comparison at the top of the income statement. The tie reflects Disney's absolute scale offsetting Netflix's superior conversion.

Balance-sheet risk

Leverage is modest at Netflix and manageable at Disney, and the factor is judged a tie. As at 30 June 2026 Netflix held $9.1bn of cash against $14.3bn of total debt, net debt of 0.35 times EBITDA, and interest cover of 16.9 times. Disney, as at 27 June 2026, held $5.2bn of cash against $46.0bn of total debt — more than three times Netflix's borrowings — for net debt of 1.72 times EBITDA; an interest-coverage figure is not available. Both run current ratios below the conventional comfort level, 1.14 at Netflix and 0.71 at Disney, which is common where deferred subscription and ticket revenue sits in current liabilities. Disney's larger debt load is set against a $110.0bn equity base, while Netflix's lighter borrowings rest on $30.2bn of equity.

Price performance and shareholder returns

Shareholder returns are structured differently. Disney paid $1.29 per share over the twelve months to June 2026, a 1.22% yield at the 4 September 2026 close, with a payout ratio of 26.0% that leaves room for the dividend to be covered by earnings of $4.85 per share. On top of that, buybacks added a 4.54% yield, giving Disney the income verdict. Netflix pays no dividend at all and returns cash solely through repurchases, at a 3.04% buyback yield against earnings of $3.18 per share. So the total cash returned as a proportion of market value is higher at Disney on both limbs of the comparison. Investors seeking income have only one candidate here; those indifferent to the form of return will note Netflix's $11.2bn of free cash flow supports repurchases without a payout commitment.

Which stock fits which investor

The split is fairly clean. Value-oriented investors are pointed towards Disney, trading at 1.7 times book and 9.4 times EV/EBITDA with a 0.37 PEG, while income seekers have only Disney's 1.22% dividend yield and 4.54% buyback yield to work with. Growth and quality both favour Netflix: 12.6% annual revenue compounding over both three and five years, a 28.2% net margin and a 33.6% return on invested capital. Netflix's style tag is high-quality, Disney's mature. The overall score of 4 to 2 to Disney reflects that four of the six factors — growth, quality, balance sheet and momentum — were too close to separate, leaving valuation and income to decide it. That outcome says more about the price attached to Netflix's returns than about the returns themselves.

• Value: DIS
• Growth: NFLX
• Income: DIS
• Quality: NFLX

Frequently asked questions

Which company earns better returns on capital?

Netflix, by a wide margin. In the twelve months to June 2026 it generated a 33.6% return on invested capital and a 49.5% return on equity, against 8.8% and 7.9% at Disney over its twelve months to June 2026.

Which is cheaper on the numbers?

Disney. At the 4 September 2026 close it traded on 1.7 times book, 1.8 times sales and 9.4 times EV/EBITDA, versus 10.8 times book, 6.7 times sales and 22.5 times EV/EBITDA for Netflix. Trailing P/Es are closer: 21.7 against 24.6.

Does either pay a dividend?

Only Disney. It paid $1.29 per share over the twelve months to June 2026, a 1.22% yield with a 26.0% payout ratio. Netflix pays nothing and returns cash via buybacks alone, at a 3.04% buyback yield versus Disney's 4.54%.

Who is growing faster?

It is a tie on our measures. Netflix compounded revenue at 12.6% a year over both three and five years to fiscal 2025; Disney managed 4.5% over three years and 7.6% over five. Disney's 58.5% three-year EPS growth starts from a depressed fiscal 2022 base.

Which carries more debt?

Disney. As at 27 June 2026 it held $46.0bn of total debt against $5.2bn of cash, or 1.72 times EBITDA. Netflix's $14.3bn of debt against $9.1bn of cash equates to 0.35 times EBITDA, with interest cover of 16.9 times.

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