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Comcast (CMCSA): 2019 Top Picks' Mid-Year Update

07/18/2019 5:00 am EST

Focus: CONSUMER

Charles Carlson

Editor, DRIP Investor

Chuck Carlson, editor DRIP Investor, chose Comcast (CMCSA) as his favorite investment for 2019. The stock rose 24% in the first half of the year. Here's the latest update on the cable and media firm from the dividend reinvestment expert.

Despite the strong price gains this year, Comcast remains a favorite of mine. A big reason for the initial recommendation was valuation, and the stock still remains relatively cheap even after the nice advance this year.

Indeed, these shares sell for just 14 times expected 2019 earnings of $3.02 per share.  That’s a very reasonable price to pay for a company showing healthy top- and bottom-line growth.

Earnings estimates have jumped sharply in the last 90 days. The company has beaten consensus earnings estimates in each of the last 13 quarters, and I expect that trend to continue.

Media stocks have been better performers this year, and that trend should continue for Comcast in the second half of the year as Wall Street appreciates the firm’s strong cash flows and reassesses its “chord cutting” risks.

The reality is that Comcast is a leading internet-service provider with a cable business, and the company should see its total customer relationships across all of its services increase this year. Its theme park, film, and broadcasting properties all have good potential, too.

Finally, Comcast should show continued progress in monetizing its Sky acquisition, which gives Comcast a big footprint overseas. 

During a time when investors are worried about trade wars, Comcast offers a "port in the storm," a stock that should not be negatively impacted by tariffs and trade wars.

And the dividend yield of 2% is especially attractive in this low-interest-rate environment. I see a move to the upper $40s before year-end and still rank these shares a strong buy.

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