Is Disney richer than Apple?

Hi there! As an investment analyst, this is a question I get asked a lot. At first glance, you might think Disney with its world-famous characters and parks would be richer. But when you dig into the numbers, Apple is actually far richer financially. Let me walk you through the key facts.

## Apple is 10X More Valuable by Market Capitalization

Market capitalization simply means the total value of all outstanding shares of a company. It‘s one way to determine the "richness" of a company.

  • Apple‘s market cap as of March 2022 is a whopping $2.65 trillion.
  • Disney‘s market cap is around $180 billion.

So Apple‘s market valuation is more than 10 times larger than Disney‘s! In fact, Apple is the most valuable public company in the world by this measure.

Market Cap Growth Over Time

Looking back over the past 15 years, we can see how Apple‘s market cap has grown exponentially while Disney‘s has followed a more gradual upward trajectory:

Year Apple Market Cap Disney Market Cap
2007 $104 billion $63 billion
2012 $500 billion $96 billion
2017 $900 billion $155 billion
2022 $2.65 trillion $180 billion

Apple‘s market value has risen over 100x in 15 years thanks to the immense success of the iPhone. Disney‘s has tripled in that time through acquisitions and streaming growth. But it hasn‘t matched Apple‘s meteoric rise.

## Apple‘s Profits are 50X Higher Than Disney‘s

Profits or net income are another good indicator of financial success. Again, Apple is far ahead here:

  • In 2021, Apple earned $94.7 billion in net profit.
  • Disney‘s 2021 profits were $2 billion.

Apple‘s annual earnings are approximately 50 times greater than Disney‘s! One key reason is that Apple has very high profit margins on products like the iPhone. Disney‘s margins in businesses like streaming and parks are thinner.

Revenue Comparison

Looking at total revenue, Apple made $365 billion globally in 2021. Disney made $67 billion. So Apple‘s annual revenue is over 5 times higher than Disney‘s currently.

## Apple‘s Cash Hoard Dwarfs Disney‘s Reserves

Having a lot of cash available gives companies financial flexibility. Here the contrast is stark:

  • Apple is sitting on over $320 billion in cash reserves and marketable securities.
  • Disney has around $14 billion in cash on hand.

Apple‘s cash stockpile is more than 20 times bigger than Disney‘s. That positions it well to invest in new technologies and weather any economic downturns. Disney has less of a cash cushion.

Total Assets Comparison

In terms of overall assets, Apple and Disney are somewhat closer:

  • Apple‘s total assets are $367 billion
  • Disney‘s total assets are $193 billion

Disney‘s larger asset base reflects the immense value of its intellectual property, resorts, parks, and media content. Still, Apple‘s asset advantage highlights its financial strength.

## How Did Apple Get So Much Richer Than Disney?

Apple and Disney have taken different strategic paths that led to Apple accumulating much more wealth:

  • Apple has focused on developing groundbreaking new consumer electronics products under CEO Tim Cook.
  • Disney has grown largely through major acquisitions under Bob Iger and Bob Chapek.

For example, Apple revolutionized mobile computing with the iPhone in 2007. Disney acquired Pixar for $7.4 billion in 2006. Both moves proved incredibly successful for each company.

But Apple‘s organic innovation approach has allowed it to grow revenue and profits faster over the past decade and gain a dominant position in the tech world. Disney has relied more on buying up "home run" content companies like Marvel, Lucasfilm, and 21st Century Fox.

Both strategies have merits, but Apple‘s has translated into vastly more wealth generation recently. However, Disney owns the most valuable collection of intellectual property on Earth, giving it lasting global appeal.

## Different Business Models and Revenue Streams

Another key contrast is where the two companies generate revenue:

  • Apple makes most of its money from iPhone sales, along with other hardware like Macs and iPads.
  • Disney relies on its media networks, parks/resorts, movie studios, and streaming services for income.

This gives Apple advantages in terms of profit margins and cash flow. But Disney benefits from having highly diversified businesses that allow it to weather downturns in any one sector.

For example, Disney‘s parks suffered during the pandemic but its streaming services boomed. Apple must constantly innovate new hit devices and services to drive growth.

In summary, Apple wins hands down in terms of current profits and cash reserves. But Disney has an unrivaled IP vault and a more diversified business model.

## Could Apple Buy Disney If It Wanted To?

Given Apple‘s fortress-like balance sheet with over $300 billion in spare cash, it could definitely acquire Disney outright if it desired. Even at a substantial premium, Disney‘s market cap of around $180 billion is within Apple‘s means.

Antitrust issues could pose challenges to such a mega-deal. But with Disney struggling recently post-pandemic, the possibility of Apple looking to make a major content acquisition can‘t be ruled out down the line. Don‘t be shocked if you one day see Mickey Mouse joining hands with Apple!

Disney simply doesn‘t have the financial firepower to acquire a company of Apple‘s mammoth size. Apple is out of Disney‘s league in this regard.

## The Verdict: Apple is Far Richer Financially

So is Disney or Apple richer overall? The numbers don‘t lie:

  • Apple is over 10 times more valuable by market capitalization.
  • It makes around 50 times more in annual profits than Disney.
  • Its cash reserves absolutely dwarf Disney‘s.

Clearly, Apple is far richer financially than Disney right now. Disney was hit hard by COVID closures while Apple has gone from strength to strength under Tim Cook‘s leadership.

However, Disney owns a priceless vault of intellectual property and has an unrivaled brand name in entertainment. The company also reached 200 million streaming subscribers in 2022, showing it still has tremendous growth potential.

So while Apple is clearly richer monetarily, I wouldn‘t count Disney out just yet. The Magic Kingdom still has plenty of magic left up its sleeve. This battle of the brands is far from over!

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