Want to Keep a Nation Happy? Here's News Corp and Disney

Household giants compose the Diversified Entertainment group. Time Warner, News Corp and Walt Disney together represent a nearly $200 billion market cap. These powerhouse companies control TV stations, newspapers, movie studies, toy manufacturers, digital media outlets, and basically any other form of entertainment under the sun.

The recent rebound has had an effect on this group, but these companies' sheer size helps to prevent it from a multi-level breakdown. Because these stocks have such a wide reach, they are offered a small degree of protection through their broad-based diversification. Watch for these stocks to mainly follow the broad indexes.

With that in mind, let's take a look at the group. The Diversified Entertainment industry has a PowerRating (for Industries) of 9. From 1996-2006 industries with a PowerRating (for Industries) of 9 have achieved annualized returns of 24.07% based on 3-month historical returns. By contrast, industries with a PowerRating of 10 have an annualized return of 35.27% based on 3-month historical returns. A PowerRating of 9 is the second-best rating achievable using our proprietary formula. It would be a good idea to break this sector down into its component stocks to see if any of these companies look right for you.

News Corp (NWS@NWS | Quote | Chart | News | PowerRating) has a PowerRating (for Investors) of 9.

Time Warner (TWX@TWX | Quote | Chart | News | PowerRating) has a PowerRating (for Investors) of 9.

Disney (DIS@DIS | Quote | Chart | News | PowerRating) has a PowerRating (for Investors) of 8.