CBS’ (NYSE:CBS) stock has been on a steady rise for the past few months, thanks to good content, an improving ad market and greater efficiency in the company’s cost structure. Here we take a look at the 4 sources of income that contribute to CBS’ equity value. CBS competes with companies like Disney (NYSE:DIS), News Corp. (NASDAQ:NWS), Time Warner (NYSE:TWX) and Viacom (NYSE:VIA).
We maintain a price estimate of $27.49 for CBS, implying a slight premium to market price.
1) CBS Owned TV Stations and CBS Radio – represents 28% of the company’s stock value
CBS owned TV stations include about 30 broadcast TV stations owned by the company through the CBS Television Stations Group. These stations produce news and broadcast public affairs, sports and other programming to serve their local markets and offer content to CBS, The CW and MyNetworkTV. In addition to this, the CBS Radio division operates 130 radio stations across the U.S. and offers audiences several formats through the combination of on-air, online and new media platforms.
2) Cable Networks – represents 24% of the company’s stock value
CBS’ cable network business includes cable channels like Showtime, Flix and The Movie Channel. The company generates revenues by charging a carriage fee to service providers.
3) CBS Network – represents 16% of the company’s stock value
CBS Network is one of the biggest broadcast TV networks in the U.S. and offers a wide variety of programs. The company primarily generates revenue by selling advertising slots.
4) TV Licensing & Other – represents 14% of the company’s stock value
CBS generates licensing revenues from the syndication of shows produced or acquired by CBS television studios, CBS studios international and CBS television distribution. Besides generating licensing revenues, the company also generates revenues via distribution of home entertainment content in the form of DVDs and electronic sell-through.
Disclosure: No positions