A couple of years ago, a friend of mind who was then new to investing, asked me what stocks he should buy.

Rather than giving him a lesson on P/E ratios, cup-with-handle chart patterns or Fibonacci retracement theory, I told him to go upstairs to his twin daughters’ bedroom and take a look around the walls, the toy boxes and the stack of DVDs on the TV stand. After dutifully performing the assigned task, my friend said, “Hey, it’s wall-to-wall Disney in there.”

Bingo!

I am proud to report that with a little nudge, my friend realized that I was teaching him one of the first rules of investing, and that is to buy what you know, and buy stocks of companies that you actually spend money with.

In the approximate two years since my friend bought Disney (DIS), his position is up more than 80%. Not a bad gain for a newbie investor, and one that’s guaranteed me a spot at his holiday dinner table for years to come.

Now the question is when should my friend sell his DIS stock? I mean, how much more bullish fuel can Mickey Mouse possibly have in his tank? After all, the stock now trades at an all-time high, and in just the past five years it’s enjoyed an incredible run higher of nearly 345%, so how much longer can the magical DIS stock ride last?

DIS Stock Still Going Strong

The short answer here, in my view, is DIS stock has a lot more room to run; particularly if you’re looking for a fantastic buy-and-hold dividend stock that you can make a staple in your portfolio.

One of the reasons why DIS stock is so well positioned to continue outperforming the market is the company’s diversification of media holdings. Sure, we all know about the theme parks, Disneyland and Disneyworld, and we all know about the iconic animated films, but DIS stock benefits from a lot more than just those obvious brands.

Disney’s magical entertainment kingdom includes broadcast, radio and cable TV stalwarts such as ABC, ESPN, and Disney Channels Worldwide. It also has partnerships with streaming video services such as Hulu. Of course, there are all of the books, toys and other Disney-brand products that are sold in just about every corner of the globe.

Oh, and let’s not forget the recent acquisitions, such as a little brand called Star Wars, which Disney acquired with Lucasfilm, and the ubiquitous superhero franchise of Marvel.

My question to any DIS stock naysayer is this: Do you really think that these iconic brands are going to die down anytime soon?

Financially speaking, Disney is about as good as it gets. During its most recent quarter, the company saw a top-line of $12.3 billion, a 9% year-over-year bump. Earnings also came in strong, with EPS of $1.04 cents on a bottom-line of $1.84 billion. That’s a staggering 33% year-over-year increase.

DIS Stock Outlook

Now, that’s not to say that DIS stock is a guaranteed winner. No stock is. But the fact that the shares trade at new all-time highs is something that shouldn’t frighten investors. A new high doesn’t necessarily mean a stock has peaked. It simply means that investors are more confident in the stock than ever before. So, if you’re worried about a buying at a new high, don’t be.

The running concern for DIS stock, or any company, is continuing to deliver and build on past success. Disney has to keep the pedal to the metal in terms of delivering content winners that people will consume. And while the company has proven its prowess in this field, there’s no guarantee that future tastes will be in step with Disney’s content creation.

Finally, there’s a cyclical element to DIS stock. After all, entertainment is a discretionary item, so if the economy slumps the way it did in 2008-2009, DIS stock could get slammed along with it.

However, short of a big drawdown in the macro economy (one that would slam just about all stocks), I think the odds are definitely good that Mickey Mouse has a lot more bullish energy to run DIS stock a lot higher from here.

As of this writing, Jim Woods was long DIS.