Comcast Corp (CMCSK) is attractively priced, with a PEG ratio below 1.0 and trading just above book value.
The company – which is in the process of acquiring a controlling interest in NBC Universal – is the largest cable and internet service provider in the United States.
Solid Top-Line Growth
Total revenue increased 6.1% compared to the second quarter in 2009. The company saw growth in several of its divisions:
The average monthly revenue per video customer increased 8.0% to $127.78.
Operating income was essentially flat at 39% of total revenues. Earnings per share was 33 cents, a penny shy of the Zacks Consensus Estimate.
Free cash flow increased 15.8% year-over-year.
Returning Value to Shareholders
Comcast has returned much of its free cash flow to its shareholders. The company has spent $600 million year-to-date repurchasing approximately 36.4 million shares.
Comcast increased its dividend in 2010 by 40%. It currently yields 2.2%.
Outlook
The Zacks Consensus Estimate for 2010 $1.23, up 11% over 2009 EPS. The 2011 estimate is 18% higher than 2010 at $1.45.
Check out the Price & Consensus chart. The estimates for 2011 are moving up in a nice stair step pattern:
Analysts are projecting earnings to grow around 15% per year over the next 5 years.
The stock trades at 14.5x forward earnings, a discount to the industry average of 15.1x. The price to book ratio is just 1.2, also below its peers at 1.4.
The stock is a Zacks #2 Rank (Buy). It has a market cap of $49.4 billion.
COMCAST CLA SPL (CMCSK): Free Stock Analysis Report
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