Discovery Communications Inc. (DISCA): A Quality Investment in Content

For valuation, Discovery Communications is currently trading at 30 times earnings, making it more expensive than Viacom at 16 times earnings and Disney at 19 times earnings. Discovery Communications doesn’t offer any yield, whereas Viacom currently yields 1.80%, and Disney yields 1.20%. Furthermore, Discovery Communications and Viacom sport debt-to-equity ratios of 1.20 and 1.27, respectively — both above the industry average of 0.50. Disney, on the other hand, has a debt-to-equity ratio of 0.38.

Conclusion

All three companies seem to have good long-term potential, and Discovery Communications looks to be a quality investment in content. However, Disney should be the top long-term investment option in this group. Disney offers the broadest diversification, the strongest brand, and the best debt management. The 1.20% yield doesn’t hurt, either.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Walt Disney (NYSE:DIS). The Motley Fool owns shares of Walt Disney.

The article A Quality Investment in Content originally appeared on Fool.com and is written by Dan Moskowitz.

Dan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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