Buy The Dip in Disney After Magical Profit Beat

Disney's fourth-quarter financial results, released in November 2022, surpassed analysts' expectations with earnings of $1.12 per share, beating estimates by 12 cents. This strong performance was driven by the company's media segment, which includes its streaming service, Disney+, and its studio entertainment division.

The media segment reported revenue growth of 36% year-over-year, with Disney+ now boasting over 137 million subscribers – a significant increase from the previous quarter's report of 118 million subscribers. This growth can be attributed to the successful release of several high-profile shows and movies, such as "The Mandalorian" Season 3 and "She-Hulk: Attorney at Law."

In addition to its media successes, Disney's theme park segment also saw a rebound, with revenue increasing by 31% compared to the same quarter in 2021. This growth can be attributed to the gradual recovery from the pandemic-induced closures and capacity restrictions.

As a result of these strong earnings, Disney announced a significant increase to its capital return program. The company plans to increase its annual dividends by approximately 50%, from $1.68 per share to $2.52 per share, starting with the dividend payment due in the summer of 2023. This represents a total capital return to shareholders of approximately $24 billion through a combination of share repurchases and dividends over the next two years.

This increase in Disney's capital return program signifies the company's confidence in its financial position and its commitment to rewarding shareholders. With its media segment continuing to grow and its theme parks recovering, Disney is well-positioned to continue delivering strong financial results.

Therefore, the "Buy The Dip" strategy could be a viable option for investors looking to enter or increase their positions in Disney stock following the impressive earnings report. However, it's essential to consider the overall market conditions and individual investment goals before making any investment decisions.