CBS Corporation (CBS) Will Continue Its Earnings Growth

CBS pays a modest dividend yield of around 1.1%, however the company has an excellent buyback program, with $2.8 billion remaining in authorized share repurchases, which the company anticipates completing by 2014.  Since 2010 the number of outstanding shares has dropped from 694.5 million to 635.4 million, a reduction of 8.5% of the total in just two years.

Analysts tend to agree, and forward growth projections are very optimistic.  When CBS reports earnings later this month, they are expected to report $2.55 per share for 2012, which would be a nice increase from the $1.94 in 2011.  These earnings are further expected to increase to $2.92 and $3.31 in 2013 and 2014, respectively, for a 3-year annual average growth rate of 18.6%, one of the best forward growth rates in the market.

Considering this growth CBS is very attractively valued right now, trading at just 16.5 times 2012’s earnings.  It is almost unheard of for a company to be trading at a lower P/E ratio than its growth rate (normally the P/E is about twice the growth rate).  While this certainly implies that the market is uncertain of the company’s ability to deliver on these projections, however I believe that the company is heading in the right direction to do just that.

The article This Broadcaster Will Continue Its Earnings Growth originally appeared on Fool.com and is written by Matthew Frankel.

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