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I’d ignore the Cineworld share price and buy this US stock for my ISA instead

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Now up over 30% since the beginning of 2021, the Cineworld (LSE: CINE) share price is looking perky. For perspective, the FTSE 250 index featuring the silver screen operator is up just 2%. 

As good as this performance is for those who had the courage to invest, I’m more likely to buy a related stock from the US market. Before revealing its identity, I’ll briefly recap on why I’m not tempted by Cineworld. 

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Cineworld share price: too much too soon?

First and foremost, the company remains heavily indebted and dependent on fresh liquidity to keep going. It’s somewhat inevitable that many traders are betting the Cineworld share price will fall in the months ahead. 

Second, the movie schedule continues to be impacted by the pandemic. Since studios need to be confident that they can make a decent return on their money, I wouldn’t be shocked if more delays were announced.

Third, there’s no guarantee moviegoers will rush back when cinemas reopen. This may be due to an ongoing psychological wound left by coronavirus or the simple desire to be outdoors when good weather arrives.

To be fair, Cineworld has some plus points too. Consumers are craving a return to much-loved activities and it could benefit even more from people being unable to go on holiday for much of 2021.  

As an investor, however, I need to be sure that my money goes into high-quality, multiple-product companies more likely to survive the coronavirus storm. This brings me to a far less risky alternative in the entertainment space.  

This US stock looks like a better bet

At £333bn, US behemoth Disney (NYSE: DIS) towers above Cineworld in size. But it’s not just its sheer market clout that makes this a more defensive pick. Disney owns some of the biggest brands/franchises going, including Star Wars and Marvel as well as companies such as Pixar. It has theme parks, cruise liners and exposure to sports via ESPN. It earns stacks of cash from merchandising every year. 

I’d say Cineworld needs Disney a whole lot more than Disney needs Cineworld. The US giant can easily distribute its own films and TV shows via its streaming service. Boosted by people being forced to stay indoors due to lockdowns, it now has 95 million subscribers to Disney+. It expects up to 260 million by 2024.

No sure thing

Naturally, there are still challenges ahead. Disneyland and co remain closed due to the coronavirus. Even once they are permitted to open, restrictions on the number of visitors are possible. If not, social distancing measures look inevitable, which doesn’t exactly sit well with the ‘magical’ atmosphere it wants to create. In addition to this, departures of its cruise ships remain suspended. Naturally, Disney will also continue to face stiff competition for eyeballs from the likes of Netflix and Amazon.

Having recently hit a record high, one might reasonably argue that a lot of optimism is already in Disney’s share price too. A twist in the coronavirus tale could put paid to that. Due to the size difference, the Cineworld share price is theoretically more likely to double in value in the near future than Disney.

In spite of all this, I know which I’d feel more comfortable owning within my Stocks and Shares ISA. While Cineworld is on life support, the Mouse is in rude health. 

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