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With a growing demand for entertainment content, the entertainment industry is expanding rapidly. Comcast Corporation (CMCSA), Charter Communications, Inc., (CHTR), are both well-known players in this industry, and they should all benefit from its growth. Which stock is better to buy right now? Find out more.
Comcast Corporation (CMCSA), a Philadelphia-based media and technology firm, is headquartered in the United States. The company operates via Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment and Theme Parks. It also has Sky segments. Charter Communications, Inc., (CHTR), Stamford, Conn., is a cable operator and broadband connectivity company that serves residential and commercial customers throughout the United States.
Over-the-top platforms have replaced traditional media in the entertainment sector. This has seen entertainment evolve quickly. To remain relevant, industry players invest in new technologies and develop their distribution systems. Global entertainment and media markets are expected to expand at 10.4% annually over the next nine year, to $6.71 trillion by 2030. CMCSA, CHTR and other prominent entertainment stocks are predicted to continue growing.
CHTR shares have gained 32.3% over the last six months while CMCSA returns 12.1%. Compare that to CMCSA’s 14.1% return, CHTR has seen a 20.6% increase in its year-to date. CMCSA has 38.8% more gains than CHTR’s 29.9 span>.
Which stock should you buy right now? Let’s see.
ViacomCBS Inc. and CMCSA formed a partnership on August 18 to launch a subscription video-on-demand (SVOD), service that will be available in over 20 European countries, reaching 90 million households. The partnership will allow the companies to expand their markets and establish a leading position in SVOD Europe.
ViacomCBS also collaborated with CHTR. ViacomCBS and CHTR announced multi-year, comprehensive distribution agreements on July 15. These agreements will allow ViacomCBS to continue carrying ViacomCBS’ leading portfolio as well as licensing ViacomCBS streaming services. These agreements will allow CHTR’s customers to have a better experience and further its strategic interests in advanced advertising, aggregated video stores concept and streaming apps.
Recent Financial Results
CMCSA saw its revenues rise 20.4% to $28.55 Billion in the fiscal second quarter ended June 30, and this was a 20% increase year-over-year. Operating income increased 18.5% to $5.51 Billion from the year before. The adjusted net income of the company was $3.94 Billion, an increase of 24.3% over last year. Adjusted EPS rose 21.7% to $0.84 year-over-year.
CHTR saw its total revenue rise 9.5% to $12.80 Billion in the fiscal second quarter ended June 30, from $1.02 billion a year ago. The net income of the company grew by 33.2% to $1.02 Billion, while net cash flow from operations increased 13.3% to $4.00 Billion. The company’s earnings per share grew 45.7% to $5.29 year-over-year.
Future and Expected Financial Performance
Over the last three years, CMCSA’s EBITDA has grown by 4% and 7.5% respectively. Analysts predict that CMCSA will see its revenue rise by 11.3% this year, and 6.5% in the next. The company’s EPS will grow by 15.4%, 19.5%, and 21.8% over the next quarter. In the future, it is projected that its EPS will grow by 18.7% per year over five years.
CHTR’s EBITDA has grown by 7.5% and 5.5% respectively over the last three years. Analysts predict that the company will see a 7.2% increase in revenue in the current quarter. This is compared to 6.9% for the previous year and 5.6% the following year. The company’s EPS will grow by 44.6%, 38.3%, and 40% in the following year. In addition, CHTR’s EPS growth is projected to be 36.8% per year over the next five-years.
CMCSA’s 12-months-tiling revenue is 2.18x that of CHTR. CMCSA’s trailing-12-months revenue is 2.18 times that of CHTR’s, at 44.47% and 7.78 span>.
CMCSA has a ROA and ROTC that are 4.27% and 5.84% respectively. This compares with CHTR which is 5.29% and 4.20%.
CMCSA here is much more lucrative.
CHTR currently trades at 4.64x in terms of forward EV/Sales. This is 31.5% more than CMCSA’s 3.18x. CHTR’s forward EV/EBITDA ratio of 11.82 is 9.8% more than CMCSA’s 10.66.
CMCSA here is very affordable.
CMCSA’s overall rating is B, which translates to Buy according to our POWR Ratings System. CHTR has an overall rating C which is equivalent to Neutral. Each factor is weighted according to its optimal value in the POWR Ratings.
Sentiment grade at CMCSA is B. Analysts expect that the stock will gain 13.1% in the coming 12 months. This is a justified positive sentiment. CHTR has, however, a Sentiment grade of C. According to the Sentiment grade, analysts expect stock prices to rise 4.4% within the next few months.
CMCSA ranks #1 among the nine stocks within the Entertainment – TV & Internet Providers sector, and CHTR comes in at #5.
We have also rated stocks based on Stability, Quality and Sentiment. You can also view all CHTR ratings.
Entertainment companies CMCSA, CHTR and other entertainment businesses are expected to see steady growth for a long time. We believe CMCSA is a better investment because of its strong financials and larger profit margins.
Research shows that stocks with an overall rating of strong buy or buy increase your chances of success. Here are all of the highest-rated stocks within the Entertainment – TV & Internet Providers sector.
After-hours trading on Tuesday saw CMCSA shares remain unchanged. Year to date, CMCSA shares have increased 15.14% compared with a 20.60% increase in benchmark S&P 500 during that same time.
Subhasree Kara is the author
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.
The postComcast vs. Charter Communications: Which Entertainment Stock is a Better Buy?This article was first published onStockNews.com
Publiated at Tue 24 August 2021 22.26:03 +0000