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Comcast Corporation (CMCSA) operates as a media and technology company worldwide. On October 30, 2013, the company reported third-quarter earnings of $0.65 per share which was beat the consensus of analyst estimates by four cents. The stock is up 29.34% in the past year excluding dividends (up 31.15% including dividends) and is beating the S&P 500 (SPY), which has gained 24.76% in the same time frame. I currently don't hold Comcast in my dividend portfolio but it has been popping up in my brain lately as an investment and with all this in mind I'd like to take a moment to evaluate the stock on a fundamental, financial, and technical basis to see if it's worth buying some right now.

Fundamentals

The company currently trades at a trailing 12-month P/E ratio of 19.23, which is fairly priced, but I mainly like to purchase a stock based on where the company is going in the future as opposed to what it has done in the past. On that note, the 1-year forward-looking P/E ratio of 17.26 is currently fairly priced for the future in terms of the right here, right now. The 1-year PEG ratio (1.26), which measures the ratio of the price you're currently paying for the trailing 12-month earnings on the stock while dividing it by the earnings growth of the company for a specified amount of time (I like looking at a 1-year horizon), tells me that the company is fairly priced based on a 1-year EPS growth rate of 15.25%. The company has great near-term future earnings growth potential with a projected EPS growth rate of 15.25%. In addition, the company has great long-term future earnings growth potential with a projected EPS growth rate of 19%.

Financials

On a financial basis, the things I look for are the dividend payouts, return on assets, equity and investment. The company pays a dividend of 1.6% with a payout ratio of 31% of trailing 12-month earnings while sporting return on assets, equity and investment values of 4.2%, 13.9% and 9.4%, respectively, which are all respectable values but nothing to go writing home about. Because I believe the market may get a bit choppy here and would like a safety play, I don't believe the 1.6% yield of this company is good enough for me to take shelter in for the time being. The company has been increasing its dividends for the past six years.

Technicals

(click to enlarge)

Looking first at the relative strength index chart [RSI] at the top, I see the stock muddling around in overbought territory with a value of 67.03. Next I will look at the moving average convergence-divergence [MACD] chart next and see that the black line just crossed below the red line with the divergence bars decreasing in height, indicating the stock may come up on some downward momentum. As for the stock price itself ($48.65), I'm looking at $49.27 to act as resistance and $46.68 to act as support for a risk/reward ratio, which plays out to be -4.05% to 1.27%.

Recent News

  1. During the company's earnings call CEO Neil Smit stated that cable operators have been calling about licensing the company's X1 platform for video-on-demand.
  2. On the morning of 30Oct13 the company reported third-quarter earnings of $0.65 which beat analyst estimates by $0.04 on revenue of $16.15 billion which missed estimates by $0.11 billion.
  3. The company declared a quarterly dividend of $0.195 per share with an ex-date of 30Dec13 and pay date of 23Jan14.

Conclusion

The company rose pretty high after it reported net income that topped expectations. With that said, the company appears to be fairly valued on future earnings. It has great earnings growth potential in the near-term and long-term but has jumped too high after earnings. The stock has a low yielding dividend and the technicals look overbought to me. I really like the prospects of the company but want to see it come down some more before I initiate a position in it.

Disclaimer: These are only my personal opinions and you should do your own homework. Only you are responsible for what you trade and happy investing!

Source: Comcast Has Great Earnings Growth Potential But The Dividend Is Low