Top Picks 2017: Comcast

01/05/2017 6:00 am EST


Charles Carlson

Editor, DRIP Investor

For a favorite growth stock for the coming year, I remain a fan of this media giant whose operations include film entertainment and theme parks along with cable and broadband businesses, notes dividend expert Chuck Carlson, editor of DRIP Investor.

Cash flow remains strong at Comcast (CMCSA) and the firm continues to add subscribers. Comcast grew earnings per share 15% to $0.92 in the September quarter, easing past the consensus by a penny.

Sales increased 14% to $21.32 billion on 7% growth for the cable business and 28% growth from NBCUniversal.

Comcast reported 32,000 net additions for video, its strongest September quarter in a decade.

Excluding the Summer Olympics and Super Bowl, NBCUniversal posted 6% higher revenue, as strength from theme parks and cable networks overcame some softness from broadcast TV and the movie business.

Expanding its commitment to online media, Comcast's NBCUniversal has increased its investment in BuzzFeed by $200 million.

In August, Comcast agreed to take an initial $200 million stake in BuzzFeed, valuing the company at $1.5 billion at the time.

Comcast CEO Brian Roberts announced plans to launch a wireless service by the middle of 2017. The hybrid service will utilize both Verizon Communications' network and Comcast's 15 million Wi-Fi hotspots.

A 2011 deal with Verizon (VZ) gives Comcast the option of leasing the telecom's airwaves, presenting the cable giant with a relatively inexpensive path toward entering the wireless business.

Comcast plans to bundle the wireless service with its cable and home-internet services.

The stock yields 1.6%, which is a nice kicker to its capital-gains potential. Comcast offers a traditional dividend reinvestment plan. Investors must be a registered shareholder of at least one share in order to enroll in the DRIP.

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