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Will Proposed Increase In Buyback Program Help Comcast (CMCSA) Stock Today?

NEW YORK (TheStreet) -- Comcast Corp. (CMCSA) plans to increase its share buyback program by $2.5 billion if its acquisition of Time Warner Cable Inc.  (TWC) is approved by shareholders, CFO Michael Angelakis told Bloomberg on Monday.

Comcast was up 1.35% to $50.00 in early trading Monday.

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The addition would be on top of a current $3 billion buyback plan in place if the deal is approved. The additional $2.5 billion may not be the end of the buyback program's expansion either as that number could increase with the sale of the company's cable systems.

The sale of some the company's cable systems -- which serve 3 million subscribers -- would be worth at least $17.6 billion, according to Angelakis, and a "vast majority" of the proceeds would be put into Comcast's buyback program.

Comcast's $45 billion acquisition of Time Warner Cable must first be approved by government regulators. The planned merger would combine the number one and four cable providers in country, respectively, and boost the number of Comcast subscribers to 30 million.

TheStreet Ratings team rates COMCAST CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate COMCAST CORP (CMCSA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, growth in earnings per share, increase in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CMCSA's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 6.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • COMCAST CORP has improved earnings per share by 28.6% 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 $2.56 versus $2.29 in the prior year. This year, the market expects an improvement in earnings ($5.70 versus $2.56).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Media industry average. The net income increased by 26.0% when compared to the same quarter one year prior, rising from $1,518.00 million to $1,913.00 million.
  • You can view the full analysis from the report here: CMCSA Ratings Report
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