RealMoney.com: Tune In to CBS

Editor's note: This article originally appeared on RealMoney.com on July 24.

It looks like CBS (CBS Quote) is finally cheap enough. At the current price, the shares yield more than 6%, and the business is getting better. The company is committed to building shareholder value by returning cash and is expected to keep increasing the payout -- the company has done so in six of the last nine quarters. In the first quarter, the company generated more than $900 million in free cash flow, which more than supports the payout. CBS is also sitting in a substantial cash hoard, with more than $2 billion on its balance sheet. Management is looking for acquisitions in what it considers to be three key areas: deals that add programming content, new interactive technologies and content, and outdoor advertising companies that increase international exposure.

In the core television business, CBS has a solid prime-time lineup and is expected to continue to show healthy ad rates. The current political season is going to help the bottom line. In the first quarter, the company benefitted from the primary elections, with political ad revenues climbing to record levels. Syndication revenues in the first quarter were also up substantially. The company renewed its Everybody Loves Raymond deal and put together a self-distribution deal for the megahit series CSI. The two deals led syndication revenues to an 85% gain in the quarter. CBS currently has eight of the top 10 syndicated shows and has a very deep pipeline that will allow syndication revenues to continue growing.

Cable channel Showtime is also doing well for the company. The suite of Showtime channels added more than 5 million subscribers over the last year. The network's edgy original series, such as Dexter and Weeds, have attracted viewers to the network and have done very well in syndicated and DVD sales. At the Television Critics Association summer press tour, the company announced several new series, including a spinoff from hit show The L Word. The network also announced a seven-year movie deal with The Weinstein Company that will allow them to continue adding to the network's movie programming.