5). Growth in US Internet Market: The company’s broadband internet segment makes up 23.44% of overall business, and is located in the rapidly expanding United States Internet market, growing from 82.6 million in 2008 to 100 million currently, and with projections placing the number of US internet households in 2019 at 123 million, this growth market presents an incredible opportunity for the company.
Threats:
1). Online Video Streaming Services: Cable services make up a considerable portion of Comcast’s overall revenue, and the growing popularity of online video streaming services such as Netflix and Hulu pose a major threat to Comcast as they are less expensive and sometimes more accommodating to viewers
Competitors:
Major publicly traded competitors of Comcast include Time Warner Cable Inc (NYSE:TWC), News Corp (NASDAQ:NWSA), CBS Corporation (NYSE:CBS), and The Walt Disney Company (NYSE:DIS). All of these companies operate in the same industries as Comcast and compete directly with the company for the business of consumers. Time Warner Cable is valued at $25.88 billion, pays out a dividend yielding 2.99%, and carries a price to earnings ratio of 12.62. News Corp is valued at $67.20 billion, pays out a dividend yielding 0.59%, and carries a price to earnings ratio of 17.06. CBS is valued at $20.36 billion, pays out a dividend yielding 1.08%, and carries a price to earnings ratio of 19.25. Disney is valued at $100.40 billion, pays out a dividend yielding 1.35%, and carries a price to earnings ratio of 17.99. Time Warner is primarily focused on providing video, high-speed data, and voice services to its United States customers, and poses a major threat to Comcast in certain regions of the country. New Corp is heavily diversified with segments stretching from filmed entertainment to publishing, however the company competes most directly with Comcast in its cable network segment. CBS focuses most heavily on its cable networks segment and competes with Comcast for the viewers’ attention. Walt Disney is greatly diversified, with operations from parks and resorts to studio entertainment, however a small portion of the overall company is located in the cable networks industry.
The Foolish Bottom Line:
Financially, Comcast is extremely solid. The company possesses accelerated revenue growth, a fairly reasonable valuation, and a strong free cash flow position. Despite the company’s single digit profit margin and net debt, accelerated growth is projected to stem from the company’s rapidly expanding NBC segment and growing potential customer base. In the long run, Comcast is a tremendous investment that should provide investors with rewarding returns over the coming decades, however investors should wait for any pullback from these historic prices before pouring in.
The article All Time Highs for This Entertainment and Information Giant originally appeared on Fool.com and is written by Ryan Guenette.
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