Comcast Stock Is Only TV Entertainment "Buy," These 2 Others Are Duds Amid soaring prices, entertainment giants have failed to retain their optimal pandemic-era performances. However, demand for TV entertainment remains robust. Quality TV entertainment stock Comcast (CMCSA) could be worth buying...
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Amid soaring prices, entertainment giants have failed to retain their optimal pandemic-era performances. However, demand for TV entertainment remains robust. Quality TV entertainment stock Comcast (CMCSA) could be worth buying now. However, fundamentally weak DISH Network (DISH) and WideOpenWest (WOW) might be best avoided. Keep reading….
The TV entertainment industry suffered aplenty amid record high prices, with major entertainment giants failing to retain their pandemic-era subscription rates. However, watching TV remains the most preferred leisure activity.
According to reports, men spent 3 hours/day watching TV, while women spent 2.70 hours. Demand for daily TV content is robust and should bode well for the TV entertainment industry.
Moreover, investors' interest in entertainment stocks is evident from the Invesco Dynamic Leisure and Entertainment ETF's (PEJ) 4.8% gains over the past month. In addition, the global entertainment and media market size is projected to grow at a CAGR of 5.9% from 2022 to 2028.
Given the backdrop, top-rated TV entertainment stock Comcast Corporation (CMCSA) could be a solid addition to your portfolio. However, fundamentally weak DISH Network Corporation (DISH) and WideOpenWest, Inc. (WOW) might be best avoided now.
Stock to Buy:
Comcast Corporation (CMCSA)
CMCSA, America's largest cable provider to small and mid-size businesses, operates as a media and technology company worldwide. It operates through Cable Communications; Media; Studios; Theme Parks; and Sky segments.
On August 22, 2022, CMCSA launched an additional multi-gig Internet speed tier for Xfinity and CMCSA Business customers in Colorado Springs. This launch makes up for the fastest upload speed to date and is a landmark addition to CMCSA's portfolio.
In addition, on August 1, 2022, CMCSA announced its strategic partnership with Fortinet (FTNT), a global leader in broad, integrated, and automated cybersecurity solutions, to offer enterprises a new set of secure access service edge (SASE) and security service edge (SSE) solutions. This collaboration is expected to boost business prospects for both companies.
CMCSA's revenue came in at $30.02 billion for the second quarter ended June 30, 2022, up 5.1% year-over-year. Its adjusted EBITDA increased 10.1% year-over-year to $9.83 billion. Moreover, the company's adjusted net income came in at $4.51 billion, up 14.3% year-over-year.
Analysts expect CMCSA's revenue to increase 4.6% year-over-year to $121.72 billion in the current year. Its EPS is estimated to increase 11.1% year-over-year to $3.59 in 2022. It has surpassed EPS estimates in all four trailing quarters. CMCSA's shares have lost marginally intraday to close the last trading session at $37.24.
CMCSA's POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
CMCSA has a B grade in Stability and Quality. Within the Entertainment - TV & Internet Providers industry, it is ranked #1 among nine stocks. Click here to see the additional POWR Ratings for Sentiment, Value, Growth, and Momentum for CMCSA.
Stocks to Avoid:
DISH Network Corporation (DISH)
DISH and its subsidiaries offer Pay-TV services in the United States. The company operates in two segments, Pay-TV and Wireless. It has around 10.71 million pay-TV subscribers in the United States, including 8.22 million DISH TV subscribers and 2.49 million SLING TV subscribers.
On July 21, 2022, DISH announced the launch of ViX+ on DISH TV and SLING TV, enabling customers to subscribe to ViX+ directly through its platforms. However, declining subscribers might hamper optimal benefits from this launch. The company's Sling TV subscribers came in at 2.20 million for its latest quarter, down 9.9% year-over-year.
DISH's total revenue came in at $4.21 billion for the second quarter ended June 30, 2022, down 6.2% year-over-year. Its net income decreased 22.1% year-over-year to $522.83 million. Moreover, the company's EPS decreased 22.6% year-over-year to $0.82.
Analysts expect DISH's revenue to decrease 5.8% year-over-year to $16.85 billion in the current year. Its EPS is estimated to decrease 33% year-over-year to $2.54 in 2022. It missed EPS estimates in three of the four trailing quarters. Over the past year, the stock has lost 59.7% to close the last trading session at $17.40.
DISH's POWR Ratings are consistent with this bleak outlook. It has an overall D rating, equating to a Sell in our rating system. DISH has an F grade for Quality and a D for Growth. It is ranked #8 in the same industry.
We have also rated DISH for Value, Momentum, Sentiment, and Stability. Get all DISH ratings here.
WideOpenWest, Inc. (WOW)
WOW provides high-speed data, cable television, and digital telephony services to residential and business customers in the United States. It currently serves approximately 1.90 million homes and businesses and 532,900 customers in the states of Alabama, Florida, Georgia, Michigan, South Carolina, and Tennessee.
WOW's total revenue came in at $176.10 million for the second quarter ended June 30, 2022, down 3.2% year-over-year. Its telephony segment revenue decreased 11.6% year-over-year to $12.90 million. Also, the company's video revenue decreased 13.7% year-over-year to $47.70 million.
Street expects WOW's revenue to decrease 31.9% year-over-year to $704.31 million in 2022. It missed consensus EPS estimates in each of the trailing four quarters. Over the past three months, the stock has lost 15.1% to close the last trading session at $18.46.
WOW's POWR Ratings reflect its poor prospects. The stock has an overall D rating, equating to Sell in our POWR Ratings system. WOW also has a D grade for Value and Sentiment. It is ranked last in the same industry.
Beyond what is stated above, we've also rated WOW for Quality, Growth, Momentum, and Stability. Get all WOW ratings here.
CMCSA shares were trading at $37.15 per share on Wednesday afternoon, down $0.09 (-0.24%). Year-to-date, CMCSA has declined -24.90%, versus a -12.42% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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