Comcast Corporation (CMCSA): The Smartest Cable Guy on the Block

Page 2 of 2

In addition to offering comparable prices to Time Warner Cable Inc (NYSE:TWC) and DIRECTV (NASDAQ:DTV), Comcast Corporation (NASDAQ:CMCSA) offers Xfinity home control service, allowing customers to monitor their homes and also potentially save on energy use. Comcast is also a leader in on-demand TV (offering on-demand shows from all TV networks) and in cloud-based TV, allowing subscribers to watch TV on their mobile devices. Additionally, Comcast, Time Warner Cable and DIRECTV have adopted TV Everywhere, allowing subscribers to watch current shows on multiple screens and devices. An increasing number of pay TV subscribers utilize TV Everywhere, and Comcast, Time Warner, DIRECTV and other paid TV operators are using technology such as this to monetize on-demand programming including integration with Nelson ratings.

Conclusion

It seems like cable companies are thriving despite threats from Internet companies such as Netflix, Inc. (NASDAQ:NFLX), Hulu, YouTube and Amazon.com, Inc. (NASDAQ:AMZN).

Comcast Corporation (NASDAQ:CMCSA) is the largest cable company with an enterprise value of $150 billion. Time Warner Cable Inc (NYSE:TWC) is half the size of Comcasts’ cable segment and NBCUniversal is roughly comparable to Twenty-First Century Fox. If investors combine twice the value of Time Warner Cable ($56 billion x 2 = $112 billion) and the value of Fox ($76 billion), it gives an enterprise value of $188 billion, which is much more than the value of Comcast.

Based on the valuations of its peers, Comcast’s market capitalization is $38 billion less than its market value. This simple calculation does not include the leverage Comcast derives from having combined cable, TV, and movie businesses in one company. With this and the factors discussed above, Comcast shares could significantly advance once the NBCUniversal acquisition is fully integrated.

Delian Naydenov has no position in any stocks mentioned. The Motley Fool recommends DirecTV.

The article The Smartest Cable Guy on the Block originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Page 2 of 2