Is Comcast a Good Investment?

PHOTO CREDIT: Comcast

OVERVIEW

Comcast Corporation is a media company based in the United States. The company offers its products and services all over the world. They operate through the Xfinity brand, which offers cable services to consumers of all sizes. They operate through the NBC brand, which broadcasts TV shows and movies to consumers. The company also operates Universal, Illumination, Dreamworks, and many other content creating companies.

Why You Should?

  1. The COVID-19 Pandemic has boosted the demand for the company’s cable products such as its TV plans as well as its internet plans. This is because consumers and businesses are staying at home and working, which increases the demand for these services. All of this has more than made up for the fall in demand for the rest of the company’s services and solutions that it offers.
  2. As you can probably tell, Comcast offers a wide variety of products and services to its consumers. In addition to the products and services previously mentioned, it also offers theme parks (Universal) all around the world. It also owns the Philadelphia Flyers and the Wells Fargo Arena in Philadelphia. This wide range of products will always be in some sort of demand, making this company a safe one to invest in.
  3. Comcast is part of growing industries. The content creation, internet, and theme parks will be in high demand after this pandemic comes to an end. This will further benefit the company and its financial results as well as its investors.
  4. Even though Comcast owns all of these assets which look to grow over the future financial years, the stock currently trades at over 40 dollars, which is only 16 times earnings. Comcast might be a good, cheap, and safe investment for beginner investors. However, investors should know that Comcast has over 180 billion in liability, which might hamper the stock price growth in the future.
  5. The company has seen rising revenues and profits over the past couple of financial years due to the reasons mentioned above, This will allow the company to build a stronger balance sheet and help it further expand its reach across the world. This will benefit both the company and its investors. In the financial year of 2019, the company reported revenues of around 109 billion and profits of around 13 billion. Both of these metrics are higher than what they reported in the financial year of 2018 when they had revenues of around 94.5 billion and profits of around 11.7 billion.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. Comcast faces tough competition from other companies that offer cable services like AT&T, Charter, and many others. The company also faces competition from companies like Apple, Disney, Netflix, and many others for its content industry as the cord-cutting movement is popular amongst younger consumers.
  2. The COVID-19 Pandemic has also hurt some of the potentials of Comcast, as companies delay upgrade projects for their infrastructure. The fall of demand from small businesses as well as other locations like schools that have been closed due to the pandemic have also hurt Comcast’s results.

MY OPINION

I think that Comcast is a good long-term investment due to the spike in demand caused by the Pandemic. The wide variety of services that it offers also has stabilized the company during these tough economic times. However, tough competition, high liabilities, and the impacts from the COVID-19 Pandemic have hurt the company’s results.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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