5 Things to Watch This Week: Disney, Dividends, Pandora, Big Lots and Wii

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PandoraLet's go over some of the items that will help shape the week that lies ahead on Wall Street.

1. Cracking Open Pandora's Box: There's no denying Pandora's (P) popularity. The company behind the popular music streaming service closed out the month of October with 59.2 million active listeners, 47 percent ahead of where it was a year earlier.

The news gets even better for Pandora when you consider that the average user is spending more time engaging with the service. Pandora served up 1.25 billion hours of content for its listeners, a 65 percent surge over the past year.

As we head into Tuesday afternoon's report, the real question is if the company can be sustainably profitable.

Pandora is hoping that it can legislate its way to that reality. Its CEO spoke before Congress last week, arguing in favor of the Internet Radio Fairness Act that would lower the music royalties that the company needs to shell out. Pandora and its peers only have to pay a fraction of a penny for every tune it streams, but that's still a lot for a free service where ad rates are low. More than half of Pandora's revenue is going right back out in the form of royalties for musical artists and their labels.

2. Fantasyland Gets Fatter: Disney's (DIS) Magic Kingdom is officially opening its ambitious Fantasyland expansion on Thursday.

It's the largest addition to the family entertainment giant's Florida theme park since shortly after its 1971 debut. Guests will be able to go on a new Little Mermaid ride, enter the toy workshop of Belle's father to delve deeper into Beauty & the Beast, and interact with characters in richly themed greeting areas.

The highlight, for now, is the Be Our Guest restaurant. Featuring three distinctly themed dining rooms and a menu that's counter service by day and foodie-friendly with table service at night, the mammoth-sized eatery adds a new culinary attraction to a park that has been lacking in culinary offerings.

It's not the only new thing that Disney is adding to its Florida resort this week. The refurbished and updated Test Track at EPCOT also opens to new riders on Thursday.

3. Wii the Canadians: Nintendo (NTDOY) introduced its Wii U last month, but with a starting price of $300 it's not as if the video game console will be a hit with mainstream audiences right away.

It's just as well. Nintendo is quickly selling out of the few Wii U systems that it has been able to produce ahead of the holiday shopping season. However, on Friday it will roll out a $100 compact version of its flagship Wii system: the Wii Mini.

The rub is that it will only be available in Canada. Nintendo hasn't publicly decided if it plans to introduce the Wii Mini elsewhere next year.

Well, that's really not the only rub. The Wii Mini doesn't connect to the Internet, so a lot of the features including streaming videos and downloading casual games can't be done. The Wii Mini also doesn't play Nintendo GameCube discs, and that's something that may limit its appeal to those still playing older Nintendo games.

4. It Keeps on Raining Dividends: It's been an interesting time to be an income investor. Unless something changes as part of a fiscal cliff deal, tax rates are heading higher on qualified dividends next year, nearly tripling for some high earners from a 2012 cap of 15 percent.

The looming tax changes find companies scrambling to return more money to their stakeholders in 2012 in the form of special one-time dividends that are payable this month. The bartender is shouting "last call" on hefty distributions before yield chasers head into a sobering 2013.

Last week alone, Costco (COST) and Las Vegas Sands (LVS) combined to declare more than $5 billion in distributions. Expect more announcements from cash-rich companies in the coming days.

5. Big Deal: Big Lots (BIG) is one of a handful of companies reporting their latest quarterly results this week. The superstore chain that offers closeouts, overstocks, and clearance items at liquidation prices reports on Tuesday.

Despite the seemingly natural appeal of deep discounts, Big Lots has been struggling lately. Analysts are expecting a quarterly deficit on flat sales growth. Big Lots posted a small profit a year earlier. If the fundamentals don't improve soon, it won't be a surprise to see Big Lots selling its own stock certificates in its stores.

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article, except for Disney. The Motley Fool owns shares of Walt Disney, Nintendo, and Costco Wholesale. Motley Fool newsletter services have recommended buying shares of Costco Wholesale, Nintendo, and Walt Disney.



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Morris Cantonitis

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December 04 2012 at 7:05 AM Report abuse rate up rate down Reply
suebeehoney47

THANK YOU FOR THE INFO. IT IS VERY HARD TO UNDERSTAND HOW TO START INVESTING IN COMPANIES. AS MUCH AS I WOULD LIKE TO INVEST. COMPANIES ARE NOT DOING WELL??? WHO DO YOU TRUST??? I HAVE BEEN TRYING SO HARD TO FOLLOW YOU BUT, I STOPED DO TO THE FACTED IT IS SO HARD TO TAKE THE CHANCE TO BUY STOCK. I WOULD LOVE TO TAKE OUT STOCK IN A COMPANY BUT WITH ALL THAT IS GOING ON IT IS VERY HARD. THANK YOU

December 04 2012 at 5:54 AM Report abuse rate up rate down Reply