Time Warner Inc (TWX), General Electric Company (GE): Moving to Digital

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Either way, Comcast is building up the content side of its business. This is, clearly, the opposite direction of Time Warner. However, for a cable operator that has had to pay more for content, it is an important hedge. Now that it owns the content itself, it can better control its costs.

It’s also a notable business change that could be the precursor to a Time Warner like cable split down the line. If Comcast finds that the margins in owning an important video creating asset has notably better margins than owning cable lines, it could decide to use the cash cow cable business to continue building its content business. Then, at some point, just split off the cable side and be a content company like Time Warner.

The Scavenger
All of these moves, however, can open up opportunities, like the one that Meredith is rumored to be taking advantage of. While it may never be a high-growth video business, if Meredith keeps picking up unwanted “real world” assets, even small purchases, it can keep its business going for decades. That, of course, will give it plenty of time to adjust to the world around it. With a notable increase in the dividend in recent years, and the financial capacity to cover it, Meredith might be a good fit for investors seeking income. This is particularly true given its more-than-4% yield.

The Others
Time Warner is clearly shifting to a more growth-oriented profile if the deal goes through — as is Comcast. GE, meanwhile, is getting back to its roots, which should interest more conservative investors. Note, however, that the company’s finance arm is still a big part of the business, which presents some risks. GE yields over 3%. Time Warner and Comcast, with much lower dividend yields, are more appropriate for investors interested in capital appreciation.

The article Moving to Digital originally appeared on Fool.com.

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