Comcast Corporation (CMCSA) operates as a worldwide media and technology company. It works through the Cable Communications, Media, Studios, Theme Parks, and Sky segments. On the other hand, DISH Network Corporation (dish) provides pay-TV services in the United States. The company operates in two segments, Pay-TV and Wireless. It offers video services under the DISH TV brand.
The demand of entertainment providers is high due to the rising trend of watching videos and series online and increasing disposable income. Moreover, advances in television technology and growing internet penetration around the world are expected to drive the growth of the entertainment industry. According to a report by Market Reports World, the global entertainment and media market is expected to grow at a CAGR of 5.9% during 2022-2028. Therefore, CMCSA and DISH should benefit.
DISH has gained 2.3% over the past three months compared to CMCSA’s negative returns.
But which of these two stocks is better to buy now? Lets find out.
On January 27, 2022, CMCSA announced that it had increased its dividend by $ 0.08 to $ 1.08 per share on an annual basis, up 8% year-over-year. Following the increase, the Board of Directors declared a quarterly cash dividend of $ 0.27 per share on the company’s common stock, to be paid on April 27, 2022, to shareholders with a record from the closing of the business on April 6, 2022.
On February 23, 2022, DISH announced using ServiceNow (NOW) Platform to standardize network and service operations in America’s first Smart Network. Jeff McSchooler, EVP, Wireless Network Operations, DISH said, “Not only will this partnership enhance our network operations, but it also provides a long -term opportunity to help us deepen our services and offerings, delivering better network experiences with our SMART 5G ™ Network. ”
Recent Financial Results
CMCSA’s revenue rose 9.5% year-over-year to $ 30.34 billion for the fiscal fourth quarter ended Dec. 31, 2021. The company’s adjusted net income grew 35.1% year-over-year to $ 3.53 billion. Also, its adjusted EPS came in at $ 0.77, up 37.5% year-over-year.
DISH’s revenues fell 2.4% year-over-year to $ 4.45 billion for the fiscal fourth quarter ended Dec. 31, 2021. The company’s net income fell 24.7% year-over-year to $ 552 million. Also, its EPS entered $ 0.87, down 29.8% year-over-year.
Past and Expected Financial Performance
CMCSA’s revenue and EPS have grown at CAGRs of 7.2% and 6.3%, respectively, over the past three years. Analysts expect CMCSA’s revenue to increase 14% for the quarter ending March 31, 2022, and 5.4% in fiscal 2022. The company’s EPS is expected to grow 5.3% for the quarter ending March 31, 2022, and 9.6% in fiscal 2022. Moreover, its EPS is expected to grow at a rate of 11.9% per annum over the next five years.
On the other hand, DISH’s revenue and EPS have grown at CAGRs of 9.5% and 8.1%, respectively, over the past three years. The company’s revenue is expected to increase 0.3% for the quarter ending March 31, 2022, but decrease 4% in fiscal 2022. Its EPS is expected to decrease by 22.2% for the quarter ending March 31, 2022, and 26.1 % in fiscal 2022. Also, DISH’s EPS is expected to decline at a rate of 26.6% per annum over the next five years.
CMCSA’s trailing-12-month revenue is 6.50 times that generated by DISH. CMCSA is also more profitable with gross profit margin and EBITDA margin of 66.96% and 29.75% compared to DISH’s 34.35% and 21.97%, respectively.
Furthermore, the CMCSA’s ROA and ROTC of 4.73% and 6.32% were higher than DISH’s 4.64% and 5.82%, respectively.
In terms of forward non-GAAP P/E, CMCSA is currently trading at 13.13x, 24.7% higher than DISH’s 10.53x. However, DISH’s forward EV/EBITDA ratio of 10.12x is 20.3% higher than CMCSA’s 8.41x.
CMCSA has an overall rating of B, which is equivalent to a Buy in our possession POWR Ratings system. On the other hand, DISH has an overall rating of D, which translates to a Sell. POWR Ratings are calculated taking into account 118 different factors, each factor being weighed at an optimal level.
CMCSA has a B grade for Stability, in conjunction with its beta of 0.92. In comparison, DISH has a C grade for Stability, which corresponds to its 2.04 beta.
Additionally, CMCSA has a B grade for Quality. This is reasonable given CMCSA’s 66.96% trailing-12-month gross profit margin, 30.9% higher than the industry average of 51.16%. On the other hand, DISH has a D-grade Score, in conjunction with its 34.35% trailing-12-month gross profit margin, 32.9% lower than the industry average of 51.16%.
In nine stocks in Entertainment – TV and Internet Providers industry, the CMCSA ranked first. In comparison, DISH is the latest ranking.
Beyond what I said above, we also rated stocks for Growth, Value, Momentum, and Sentiment. Click here to view all CMCSA Ratings. Also, get all DISH ratings here.
As the entertainment industry is expected to grow significantly, both CMCSA and DISH should benefit. However, it is better to bet on CMCSA now because of its stable finances, higher profit margins, and better growth prospects.
Our research shows that the likelihood of success increases when a person invests in stocks with an Overall Rating of Strong Buy or Buy. See all the other stocks with the highest ratings in the Entertainment industry – TV and Internet Providers here.
CMCSA shares were trading at $ 46.63 per share on Wednesday afternoon, up $ 0.24 (+0.52%). Year -to -date, the CMCSA is down -6.89%, compared to a -7.71% increase in the benchmark S&P 500 index over the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal’s His keen interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving the price of a stock is the main strategy he follows while advising investors in his articles. More…
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