At this point, it seems like the climb to be at the top of the streaming mountain won’t end with a winner-take-all champion standing over their distinguished competitors. Instead, the race is about building a stockpile of reboots, beloved classics, and buzzworthy original series in an effort to reduce churn and keep the subscription numbers climbing.

While there are more than a few streaming services now, Disney (DIS) and Netflix (NFLX) seem to be the two biggest players currently battling to keep eyes on the app and subscribers from leaving before the next billing cycle. Of these two streaming titans, which is the better stock for investors? Let’s take a look.

Let’s start with what makes the headlines: subscriber numbers. Netflix ended 2021 with about 222 million subscribers, while Disney ended 2021 with about 129 million subscribers to their Disney+ streaming platform. So, Netflix is “winning,” right? On to the next video? Well, not so fast. Subscriber numbers don’t tell the whole story. Let’s take a look at some other metrics.

For a long time, Netflix was the place to go to watch old favorites like Friends or The Office. However, as other streaming services have launched, they have decided to keep their old favorites for themselves. Netflix either needs to find hidden gems, like Cobra Kai or Manifest, or they have to produce their own content like Squid Game, Bridgerton, and Stranger Things, which is expensive and means that they need to raise subscription prices.

This price issue played a major role in Morningstar assigning a fair value estimate of $305 a share and our 3-star rating. It’s hard to see how pricing increases won’t have an effect on whether a customer decides to keep the service once the show of the moment has been binged.

Disney, on the other hand, has a 4-star rating and a fair value estimate of $170 per share based on realigned segments and lower losses from streaming. Of course, Disney is not just their Disney+ streaming service. They also are dealing with challenges presented by “cord cutting,” which effects the revenue of ESPN, lower attendance to their parks due to COVID-19, and while the Marvel Cinematic Universe gets people to the theater more than any other property, audiences haven’t returned to theaters at 2019 levels.

Another factor to consider here is the economic moat. Netflix has a narrow moat based on the data that they are able to gather from their 222 million subscribers. Streaming video allows Netflix to determine how long people are on their app, how much of any show or movie they watch, and they can also use it to improve their service and even decide what kind of shows and movies to produce next.

Now, Disney has built themselves a wide moat that includes not just streaming but theatrical movies, cable and network TV, and theme parks. While network ratings have been on the decline, and people talk about cord cutting, about 120 million households are still subscribing to cable and watching network TV. Disney is in the TV game with ESPN, ABC, FX, and The Disney Channel. On the movie side, Marvel Studios, Pixar, Lucasfilm, Disney Animation, Disney Live action movies, and 20th Century are studios under the Disney umbrella. Not to mention that the Disney library is packed with beloved characters with cross-generational appeal that range from Cinderella to Moana to Darth Vader to Captain America to Buzz Lightyear. All of whom can be seen “in person” at Disney parks across the world. In addition to playing in theaters and on TV, all of these movies and TV show can be watched via streaming on Disney+, ESPN+, and Hulu+, which consumers can subscribe to individually or bundle together.

All of this taken together means that Disney has multiple levers for revenue in addition to their streaming service, including theme parks, character merchandise, theatrical box office, and cable TV. Compare that to Netflix, which has two levers for revenue: increasing subscriber numbers and increasing prices on those subscribers. However, increasing prices might cause those subscriber numbers to drop.

In the end, both Netflix and Disney have their ups and downs, but when it comes to investing, Disney’s wide moat and diversified revenue streams will keep the company spinning while the streaming world churns.

Senior equity analyst Neil Macker provided the research behind this segment.