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TheStreet Open House

Media Companies Look Good but Comcast Looks Great

Comcast also has a "Filmed Entertainment" segment consisting of the operations of Universal Pictures, including Focus Features, which produces, acquires, markets and distributes filmed entertainment worldwide in various media formats for theatrical, home entertainment, television, and other distribution platforms.

To add to its massive revenue-generating operation, Comcast also has a Theme Parks division that comprises theme parks, studios, and a dining, retail, and entertainment complex. Comcast Corporation also owns a multipurpose arena in Philadelphia and provides facilities management and food services for sporting events, concerts, and other events.

The company aggressively offers its services directly to residential and business customers through call centers, door-to-door selling, direct mail, television, Internet and local media advertising. Comcast actively uses telemarketing and retail outlets to promote their services.

Little wonder that its first-quarter revenue growth (year-over-year) was close to 23% and quarterly earnings growth in the first quarter soared by 30%.

The company reports second-quarter results on Wednesday. It would not surprise this author if the results exceed analysts' expectations.

If the company disappoints or barely meets earnings projections and lower earnings guidance for the third quarter, we may have a chance to buy Comcast shares closer to their June 25 intraday low of $30.21.

The stock traded as low as $28.09 on May 21, and that kind of price correction isn't out of the realm of possibilities either. The chart below shows you their stock price history and how well it correlates to their earnings per share. CMCSA Earnings Per Share Chart CMCSA Earnings Per Share data by YCharts

Comcast also pays a current dividend yield of 2.1% based on a share price closer to $31. That's a payout ratio of 28%, which is both sustainable and able to support a more generous dividend.

In contrast, News Corp's current 17 cents annual dividend pays a paltry yield of 0.74% based on a share price of $22.85. NWS had first-quarter earnings growth (year over year) of nearly 47% but the quarterly revenue growth rate was a meager 1.8% compared to Comcast's 23%.

Let's take a look at a similar chart of NWS comparing its stock price history with EPS growth. NWS Earnings Per Share Chart NWS Earnings Per Share data by YCharts

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