What To Buy: Comcast Corp's Buy Recommendation Reiterated

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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 good cash flow from operations, solid stock price performance, 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 has had sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $3,994.00 million or 16.64% when compared to the same quarter last year. In addition, COMCAST CORP has also modestly surpassed the industry average cash flow growth rate of 13.65%.
  • CMCSA's share price has surged by 34.71% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CMCSA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • COMCAST CORP's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, COMCAST CORP increased its bottom line by earning $2.29 versus $1.51 in the prior year. This year, the market expects an improvement in earnings ($5.01 versus $2.29).
  • The debt-to-equity ratio is somewhat low, currently at 0.94, 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 0.60, 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. When compared to other companies in the Media industry and the overall market, COMCAST CORP's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

Comcast Corporation operates as a media and technology company worldwide. It operates through Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment, and Theme Parks segments. Comcast has a market cap of $102.0 billion and is part of the services sector and media industry. The company has a P/E ratio of 20.00, above the S&P 500 P/E ratio of 18.00. Shares are up 27.8% year to date as of the close of trading on Monday.

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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