Comcast (CMCSA): High Marks for Dividend Safety and Growth, But What About the Cord-Cutters?

At first glance, Comcast Corporation (NASDAQ:CMCSA) looks like an investment every dividend investor should consider.

The company has increased the dividend every year since reinitiating it in 2008, recorded nearly 23% annual dividend growth over the last five years, maintained a relatively low payout ratio, and enjoyed stability from its recession-resistant businesses.

These are some of the characteristics we look for in our search for safe dividend stocks (see all five of our tips on how to find safer stocks here). Comcast shares many attributes with the investments in our Top 20 Dividend Stock portfolio (1).

However, with cord cutting gaining more and more traction, is Comcast’s future as bright as its past?

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Business Description

Comcast Corporation (NASDAQ:CMCSA) is a global media company with two main businesses, Comcast Cable and NBCUniversal.

The Cable Services business (62% of revenue) is one of the nation’s largest providers of video (29% of total revenue), high-speed internet (17%), and voice services (5%) to residential customers under the XFINITY brand. Other operations, such as business services and advertising, account for another 12% of total sales.

The NBCUniversal group (38% of revenue) is made up of four main businesses: Cable Networks, Broadcast Television, Filmed Entertainment, and Theme Parks businesses.

The Cable Networks business (13% of total revenue) consists of their national cable networks, regional sports and news networks, international networks, and cable television studio production operations. Examples of their networks include USA Network, E!, Syfy, MSNBC, CNBC, Bravo, NBC Sports, Oxygen, and the Golf Channel.

The Broadcast Television business (11% of revenue) consists of the NBC and Telemundo broadcast networks, local NBC and Telemundo broadcast television stations, and broadcast television studio production operations. They own NBC-affiliates and Telemundo stations in major U.S. cities including New York City, Los Angeles, Chicago, Philadelphia, Dallas-Fort Worth, San Francisco-Oakland-San Jose, and Miami.

The Filmed Entertainment business (10% of revenue) consists of the operations of Universal Pictures, which produces, acquires, markets and distributes films all across the world.

Finally, the Theme Parks business (4% of revenue) consists of the Universal theme parks in Orlando, Florida, and Hollywood, California, along with majority ownership of Universal Studios theme park in Japan.