CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Are these the best entertainment stocks to watch?

Discover the best entertainment and media stocks to watch in 2021 with us, the UK’s No.1 Platform.1

What's on this page?

Entertainment stocks have seen both rises and falls since 2020, as recreation turned virtual amid worldwide lockdowns. We’ve picked some of the best entertainment stocks to watch in 2021.

  1. Netflix Inc
  2. Walt Disney Co
  3. Flutter Entertainment
  4. Activision Blizzard
  5. Comcast Corp

Entertainment stocks: what you need to know about the sector

Entertainment has had one of the most varied stories of the Covid-19 pandemic. While companies specialising in live entertainment saw profits plummet amid worldwide lockdowns – even as other entertainment providers, like streaming services and gaming companies, reported huge gains. All this was indicative of the changed nature of entertainment in a pandemic-disrupted world.

However, with many countries’ lockdowns having ended and vaccination rollouts well underway, it remains to be seen whether entertainment stocks will have a different third act in months to come.

What are the different types of entertainment stocks?

  • Live entertainment and venue entertainment companies, including theme parks and cinema chains
  • Multimedia companies such as streaming services, film studios, broadcasting and television
  • Music industry companies
  • Gaming companies, including mobile, online, PC and console games
  • Gambling companies, like physical casinos and their online variants

Netflix

The year 2020 was arguably the year of Netflix, with the world turning to online streaming entertainment as life in lockdown took hold. The streaming service boasts over 200 million customers around the globe– a record 37 million signed up in 2020 alone. Accordingly, the entertainment giant’s stock skyrocketed more than 250% in 2020 and reported year-end profits of $4.6 billion - a 76% increase - and a 24% rise in revenue to $25 billion for 2020.

The future looks bright for Netflix, with 2022 slated to be its first free-cash-flow positive year – a fact that bodes well for the Netflix business model (which some have critiqued for its debt-heavy emphasis on original content creation) in future. So much so, that the streaming service has announced it is considering share buybacks, as well as plans to pay off the considerable debt it has incurred, which matures in 2021.

Walt Disney

Few companies have had a more nuanced 2020 and quarter one (Q1) 2021 than Disney. The company’s theme parks, resorts and cruise line took an understandable knock in the pandemic and the company reported an income of just $1.74 million in 2020, compared to nearly $14 million in 2019.

Despite this, February saw Disney stocks reaching an all-time high of $183.65 when the company announced its flagship Disneyland park would be reopening on 30 April 2021. Disney+ also saw significant gains at the same time, amassing over 90 million members since its debut towards the end of 2019.

The service has several notable releases planned, most notably Marvel Studios’s Black Widow. Investors should also remember that Disney has other screen giants under its belt, such as Hulu and Twenty-First Century Fox.

Flutter Entertainment

Flutter Entertainment is listed on the London Stock Exchange (LSE) and is a FTSE 100 company specialising in sports betting and gaming. This includes online casino operations, online racing betting such as the TVG Network, and mega successful PokerStars.

The entertainment company had an eventful 2020, largely due to a merger with Canadian gambling conglomerate The Stars Group. Far from the carnage of some entertainment companies’ stocks during Covid-19, Flutter Entertainment reported a 28% increase in net revenue for 2020 (equal to around £5.3 billion) and an 18% increase in operating profits, from £281 million in 2019 to £676 million in 2020.

Flutter Entertainment has also experienced wins in 2021, with its stock climbing nearly 6% on 15 March when it announced potential for a partial United States initial public offering (IPO) listing for American gambling company FanDuel in the near future. As of December 2020, Flutter Entertainment owns a 95% stake in FanDuel.

Activision Blizzard

Gaming company Activision Blizzard boasts some of the most famous and profitable video games in the world, including World of Warcraft, Call of Duty and mobile hit Candy Crush.

The company saw great gains in 2020, as worldwide lockdowns turned the masses into gamers. In fact, Blizzard’s 2020 results were so successful that they caused stock prices to climb as high as $100 the day they were released. Among other good news, the results reported a net revenue of $8.09 billion - an increase of $1.6 billion.

In late March, the company’s stock price increased again after the announcement that it was set to beat its 2021 Q1 outlook, and following the appointment of Armin Zerza as chief financial officer. However, it’s worth noting that Activision Blizzard have come under fire in the past for allegedly overworking staff in 2020, and for mass layoffs in 2021.

Comcast

Comcast is one of the biggest television and film behemoths in the world, with companies such as DreamWorks, Sky Group, NBCUniversal and AT&T Broadband. A pandemic disruption story, the company has pivoted hard into digital service offerings in the wake of falling traditional TV subscription figures.

Comcast’s revenues fell almost 5% from $10.89 billion in 2019 to $10.35 billion in 2020. Net income fell even further, a 19% drop from just over $13 billion in 2019 to $10.53 billion in 2020. That said, Comcast still managed to pay a Q4 2020 earnings per share (EPS) of $0.56, and generate a free cash flow of over $13 billion.

While traditional streams of revenue such as TV subscriptions waned, Comcast nevertheless tuned into the demand for high-speed internet, advertising and wireless services. Wireless revenue increased 35.8%, advertising revenue increased 33.8%, high-speed internet revenue increased 12.7% and cable communications increased 6.3% in Q4 2020 alone.

How to trade or invest in entertainment and media stocks

Want to trading or investing in these and other entertainment and media stocks? Complete these five quick steps to begin trading:

  1. Choose whether to trade or invest
  2. Create an account or log in
  3. Identify your opportunity
  4. Take steps to manage your risk
  5. Open and monitor your position

Trading and investing are similar terms that are sometimes used interchangeably, but there are subtle differences between them:

Trading lets you take a speculative position on a stock, exchange traded fund (ETF) or other market without taking direct ownership. Instead, you’ll be trading on whether the asset’s price will rise (known as going long) or fall (known as going short) with derivatives like CFDs Investing lets you take direct ownership of a stock, ETF or other market. You’d do this if you expect the price to rise above the price at which you opened your position, and to benefit from certain shareholder privileges like dividends and voting rights – if the company you’re investing in grants them

What’s the entertainment industry outlook?

  • Outlooks remain sunny for companies such as Netflix, which were able to capitalise on a self-isolated world’s need for at-home entertainment
  • It’s possible that more traditional forms of entertainment may once again rally if or when countries around the world begin to steadily ease their national lockdowns
  • Covid-19 appears to have changed the way the world entertains itself, maybe forever. As a result, there are interesting growth prospects for the companies that are willing to pivot to the ‘new normal’

Entertainment shares summed up

  • Entertainment has had a varied year, with many entertainment stocks either reeling or soaring in the wake of Covid-19 disruption
  • Some entertainment and media companies, most notably digital and streaming names, saw significant profits in 2020

There is potential for both great gains or big losses in future for entertainment stocks, as the nature of recreation shifts in a post-pandemic world.

Footnote

1As awarded at ADVFN International Financial Awards 2020 and Professional Trader Awards 2019.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.