The old mantra that "video streaming will kill cable" is a good example of why investors shouldn't follow catchphrases when picking stocks and how pushing against them often results in terrific buying opportunities.
Take the nation's biggest cable provider, Comcast (CMCSA) - Get Comcast Corporation Class A Report . Those who ignored cord-cutting worries and bought the stock five years ago would be sitting on a tidy 180% gain, compared with just a 68% rise for the S&P 500.
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That is to say nothing of the rising income. During that time, Comcast's quarterly dividend has jumped 144%, far more than competitors than AT&T, owner of DirecTV, which hiked its payout just 12%; Verizon, by 16%; and DISH Network, which pays no dividend at all.
And the past few weeks have delivered even more evidence that video streaming's growth is slowing.
The first piece came in June, when research firm Strategy Analytics released a report showing that Americans will spend $6.6 billion on streaming services this year, up 22% from 2015, though actually a smaller rise than last year's 29% jump.
Then there is Netflix, whose second-quarter U.S. subscriber numbers caught many investors off-guard on July 18. The undisputed leader of the streaming market pulled in 160,000 new members, again a significant rise, but it was just 32% of the 500,000 the company expected to bring in.
Finally, there are Comcast's own second-quarter earnings, which it reported last week.
The company's cable division lost 4,000 subscribers during the period, but that is also a deceptive number, because Comcast and other providers typically lose subscribers during this time as more people move, including students.
That aside, the latest results were the best in a decade. To put it in context, the company lost 69,000 subscribers in last year's second quarter.
The latest figure also followed a first quarter in which Comcast added 53,000 cable subscribers, handily topping analyst estimates of 32,000 to 35,000.
The company's main tool for hanging onto cord cutters is its web-enabled X1 set-top box, which is as easy to navigate as streaming services and, under a deal announced early last month, will soon include Netflix itself. Comcast says that 40% of its cable subscribers have the X1, up from 35% at the end of the first quarter.
Meantime, for the second quarter as a whole, earnings came in at 83 cents a share, down a penny from a year earlier but still ahead of the consensus forecast of 81 cents a share. Revenue rose 2.8% to $19.3 billion, also topping expectations of $19 billion.
Besides its cable operation, which also includes home phones, business services and high-speed Internet, Comcast owns the NBCUniversal media business. The profit decline stemmed from lower results at its movie studios due to a tough comparison with last year, when Furious 7 and Jurassic World drew big audiences.
However, that was mostly offset by steady growth at its other operations, and Comcast investors could see strong gains in the third quarter, when the company's broadcasting arm should get a boost from the Rio Olympics and ramped-up pre-election advertising spending.
Finally, just 20% of Comcast's revenue comes from outside the U.S., so it has minimal exposure to fluctuating currency rates or international issues like the Brexit.
The average analyst 12-month price target on the stock is $72, which would represent a gain of 7.5%, while the high-end estimate comes in at $84, which would be a 25% increase. The stock boasts a forward price-earnings ratio of 17.3, a discount to the S&P 500's forward P/E of 18.4.
Investors shouldn't let the cord-cutters put them off. Buy Comcast now, before the price goes higher.
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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.