I initiated a position in Comcast Corporation (CMCSA) position today at $34.5956. Comcast isn’t in my top 15 holdings.
Comcast operates as a media and technology company worldwide. It operates through Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment, Theme Parks, and Sky segments.
We recently switched our internet service provider from Consolidated Communications to Comcast and have been very pleased with the speeds and service for the cost. We bought the 100Mbps access and it routinely performs much better than this without outages, whereas with Consolidated we hardly ever reached what we were supposed to get for speeds and there were frequent outages. We also have CNBC on most of the business day so this position fits my desire to invest in companies I actively use or associate with in some way.
I chose to buy now due to the valuation and dividend yield:
- PE: 13.51
- PEG: 0.95
- Forward Dividend Yield: 2.41%
A major risk/factor for earnings the COVID-19 impact on their theme parks. This should be short term and I believe is priced in.
I’m not sure about the long term risks associated with the traditional cable business with the new streaming options. However, either way decent internet access will become more of a necessity and I’m quite impressed with their service. Also with more media companies coming out with their own streaming services it seems that a more traditional cable bundle service may look better again. Hard to say on this, but at the current price, I believe most uncertainties around this part of the business are well priced in.
With more people social distancing now and working from home, this will create more demand for more robust internet packages/services which should be good for Comcast. Their ability to bundle the internet access, cable programming and phone service into one package is quite powerful as well.
