All Time Highs for Comcast Corporation (CMSA)

Page 1 of 2

A SWOT analysis is a look at a company’s strengths, weaknesses, opportunities, and threats, and is a tremendous way to gain a detailed and thorough perspective on a company and its future.  As 2013 begins, I would like to pinpoint on a leading provider of entertainment, information, and communications products and services, Comcast Corporation (NASDAQ:CMCSA).

The Business:

Warren Buffett once said, “Never invest in a business you can’t understand.” This not only allows the investor to purchase a company with conviction, however also allows them to spot trends blind to unfamiliar eyes. With this in mind, investors in any company should fully understand the business model of the company. Comcast is a provider of entertainment, information, and communications products and services. The company’s five main segments are; cable communications (video, high-speed internet, and voice services), cable networks (national, regional, and international networks), broadcast television (NBC and Telemundo), filmed entertainment (Universal Pictures), and theme parks (Universal parks). Due to pricing power and a healthy business model, Comcast carries a net profit margin slightly under 10%, sitting at 9.53%.

Comcast Corporation (NASDAQ:CMCSA)

Strengths:

1). Accelerated Revenue Growth: In 2007, Comcast reported revenue of $30.89 billion; in 2012, the company announced revenue of $62.57 billion, representing year over year annual growth of 15.16%, a trend which is highly anticipated to sustain into the future with projections placing 2017 revenue at $80.46 billion (this explosive growth has primarily been a result of an explosion in the company’s NBC and Comcast content segment from 2010 to 2011).

2). Profit Margin Expansion: The company’s profit margin has grown from 8.40% in 2007 to 9.90% currently on a trailing 12 month basis, and this trend of profit margin expansion is extremely advantageous to the company.

3). Strong Free Cash Flow Position: In 2013, Comcast is projected to generate $9.6 billion of free cash flow from its business, a statistic which is anticipated to grow to $12 billion in 2019, and this strong free cash flow position will allow the company to reinvest in its own business and reward shareholders.

4). Dividend: Currently, Comcast pays out quarterly dividends of $0.19, which annualized puts the dividend as yielding 1.89%.

5). Institutional Vote of Confidence: 63.51% of shares outstanding are held by institutional investors, displaying the confidence some of largest investors in the world have in the company and its future.

6). Reasonable Valuation: Comcast presently withholds a price to earnings ratio of 18.80, a price to sales ratio of 1.94, and a price to book ratio of 2.36; all of which indicate a company trading with a fairly reasonable valuation, however this valuation is slightly above industry averages.

7). Established Network: As of the end of 2011, Comcast had 49.8 million total customers, and the infrastructure capable of providing video, high-speed internet, and voice services to residential and business customers, and with this established nature comes a greater level of security for investors.

Weaknesses:

1). Net Debt: Despite possessing $19 billion of cash and cash equivalents on their balance sheets, the company’s debt load of $57.4 billion results in a net debt for the company, equating to $38.4 billion, or around $14 per share.

Opportunities:

1). Acquisitions: On February 13, Comcast announced that it will pay $16.7 billion to purchase General Electric’s 49% stake in their NBC Universal joint venture, and further acquisitions could provide substantial opportunities for the company.

2). Dividend Growth: Since implementing their dividend program in 2008, Comcast has consistently raised their dividend payouts, and further dividend growth could provide opportunity to shareholders.

3). Growth in Subscription Fees: Broadband subscription fees per customer have grown from $42.90 in 2008 to $49.20 currently on a monthly basis, and further growth in the broadband subscription fee statistic will improve margins.

4). NBC: NBC cable networks revenue has grown from $2.14 billion in 2008 to $8.32 billion currently, NBC broadcasting revenue has grown from $5.94 billion in 2011 to $7.34 billion currently, NBC filmed entertainment revenue has grown from $4.24 billion in 2011 to $5.37 billion currently, and NBC theme park revenue has grown from $1.87 billion in 2011 to $2.19 billion currently; and further growth in one of the fastest growing segments for Comcast could substantially assist the company in overall growth (The NBC segment makes up 24.97% of overall business.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!