ABC has managed to create some great programs recently. Take Wipeout for example, the TV show has its own hit game on the Xbox, that game even has a sequel. How about Modern Family, a hugely successful comedy that is watched around the world. The Bachelor and Bachelorette are also watched by millions every single week that they air. ABC has also been trying its hand at online originals with the 2007 release of Voicemail.
So, they have lots of great content but does it make these companies investment worthy? Let’s take a look.
CBS is the least diversified of the bunch. Their money is made wholly from TV, Radio and Advertising with a little bit of publishing on the side. 2009 total revenues for CBS were around the $13 billion mark and had grown to $14.24 billion in FY 2011. EPS has also been growing at the company and 2012 is one of the best years yet for CBS. The current P/E at the company is 18 and the company is negatively priced to tangible book, two pretty hefty warning signals for anyone looking to invest over the long term. Debt at CBS isn’t too bad as long term debt to equity sits at 0.58. The last thing to look at is the return on investment figure. Over the last year, CBS’s ROI was 9.6% but the average over 5 years is -8.9%.
Fox is part of News Corp., a worldwide media conglomerate that owns a movie studio, numerous broadcasting venues and the Wall Street Journal. News Corp is expected to see some great growth in the coming years in terms of EPS. FY 2013 is expected to be a boost of 23.5% over FY 2012 and analysts expect to see FY 2014 EPS jump another 14% over the 2013 figure. The current P/E at News Corp. is on the high end at 25.59. Return on equity is at 10.51% at the company and they’re running with a profit margin of 7.89%. The current yield is 0.6% and it has plenty of room to grow.
Disney is the best positioned of the three companies with their theme parks, massive bay of content and huge merchandise sales. Five year EPS growth at Disney is 6.16% per year and revenues have also seen growth of 3.36% per year over the same time period. The P/E ratio is relatively low for a company with so many prospects at 17.4 and long term debt is well managed with a 0.28 long term debt to equity ratio. The five year average return on investment is 9.4%, not too bad for a huge company.
All three companies are here to stay. Picking the better one is something that will take a bit of researching time. I am an owner of Disney stock and I have been more than happy with the company’s returns over the past few years. I like the look of News Corp. but I think I’d wait for a bigger pullback on the stock before buying any. CBS has some funky numbers that I think I’ll be avoiding for now.
The article Will The TV Networks Make Me Money? originally appeared on Fool.com and is written by Ash Anderson.
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