Investors in the Walt Disney Company's (DIS) initial public offering (IPO) who held onto their investments would be very happy with their returns. If you had invested $1,000 in Disney's IPO, not including dividend reinvestment, your investment today would be worth over $3 million as of June 2018. This represents a compound annual growth rate of just over 14%.

The Disney Story

Disney began in the early 1920s when Walt Disney, the company's founder, signed a contract to produce a series of Alice Comedies. By the late 1920s, the first Mickey Mouse cartoons were released, and Minnie Mouse was introduced. In the early 1930s, Disney premiered its first full-color cartoon, and Donald Duck made his first appearance. In 1937, Disney's first feature-length animated film, "Snow White and the Seven Dwarfs," premiered.

The significance of "Snow White" for Disney cannot be understated. The film was the first animated feature film in the world and a huge financial risk for the company. The film was made during the Great Depression, and Walt stated, "There could be no compromising on money, talent, or time." After running over budget, Disney was forced to preview "Snow White" early to Bank of America's vice president, Joseph Rosenburg. The gamble paid off when "Snow White" became the most profitable film of all time. Adjusted for inflation, "Snow White" grossed more than $1.7 billion. Fresh off the heels of "Snow White," Disney moved its movie studios to Burbank, California to begin work on future classics.

In 1940, Walt Disney Productions issued its first stock through 6% cumulative convertible preferred shares. Through the 1940s, Disney released its highly regarded film "Fantasia" and formed the Walt Disney Music Company. Disney went on to release several other award-winning films and TV shows and opened Disneyland in 1955. In 1971, Walt Disney Resort opened with the Magic Kingdom near Orlando, Florida. In the 1980s, Disney expanded its theme parks internationally and continued to add parks near Orlando. Disney also expanded further into television and storefronts.

In the 1990s, Disney Publishing released its first book, and Disney released several other hit films. Disney agreed to purchase Capital Cities/ABC in 1995 and expanded online. Disney later merged with ABC and debuted ESPN magazine. Disney expanded to cruises and radio, and it purchased the Anaheim Angels.

The Math Behind the Numbers

Disney's common stock traded over the counter (OTC) prior to its IPO debut on the New York Stock Exchange (NYSE) in 1957. Investors who purchased common stock OTC would have seen significantly higher returns. The company traded for $3 per share in 1949 and rose to $52 per share before splitting two for one. Disney paid its first common stock dividend in 1956.

The company held its IPO in 1957 and sold each share for $13.88. If you had invested $1,000 at the time, you would have been able to purchase 72 whole shares. Disney has had six stock splits in company history. Your original 72 shares would equal 27,648 shares today. On August 7, 2019, the Disney stock closed at $134.86 a share, making your initial $1,000 investment worth over $3.7 million today.

Given the long dividend history of Disney and the pace of share price appreciation, if you had chosen to reinvest your dividends, you would have seen significantly higher returns.

The Present and the Future

In the 2000s, Disney continued to expand its parks internationally, built upon the success of its cruise ship lines and diversified the company's media interests. In 2006, the company acquired the Pixar animation studio, which produced films such as "Toy Story," "Cars" and "Finding Nemo." In 2009, Marvel Entertainment joined the Disney family, bringing along its famous comic book superheroes. In 2012, Disney completed the acquisition of Lucasfilm, putting the legendary "Star Wars" franchise under its control.

Disney continues to expand its five main business segments: media networks, parks and resorts, studio entertainment, consumer products, and interactive entertainment. In 2015, the company announced that it would increase its dividend payment and begin paying it semi-annually instead of annually.

Following a judge's decision in June 2018 that allowed for the AT&T and Time Warner merger, Disney competed with Comcast (CMCSA) to purchase 21st Century Fox Inc. (FOXA). In July of 2018, 21st Century Fox was sold to Disney for $71.3 billion.