Comcast Corp Stock Buy Recommendation Reiterated (CMCSA)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Comcast (Nasdaq:CMCSA) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+ . The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

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Highlights from the ratings report include:

• COMCAST CORP has improved earnings per share by 35.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COMCAST CORP increased its bottom line by earning $1.51 versus $1.29 in the prior year. This year, the market expects an improvement in earnings ($1.92 versus $1.51).
• The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Media industry average. The net income increased by 31.9% when compared to the same quarter one year prior, rising from $1,022.00 million to $1,348.00 million.
• Despite its growing revenue, the company underperformed as compared with the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 6.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
• The debt-to-equity ratio is somewhat low, currently at 0.78, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that CMCSA's debt-to-equity ratio is low, the quick ratio, which is currently 0.55, displays a potential problem in covering short-term cash needs.
• The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market on the basis of return on equity, COMCAST CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

Comcast Corporation provides entertainment, information, and communications products and services in the United States and internationally. The company's Cable Communications segment offers video, high-speed Internet, and voice services to residential and business customers. The company has a P/E ratio of 19.7, equal to the average media industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Comcast has a market cap of $72.98 billion and is part of the services sector and media industry. Shares are up 45.7% year to date as of the close of trading on Wednesday.

You can view the full Comcast Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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