Buying CMCSA At A Discount And Getting Paid To Do It

At about $27.50 per share, Comcast (CMCSA) is trading about 16% below its 52W high.

Do you think CMCSA stock is a good long-term bet at current levels? What about at a 30% discount at about $20 per share? If you think that is a steal and have some cash ready to go, here is a trade to consider.

8.1% annualized yield at 30% margin of safety by selling put options.

• Sell a long-dated Put option expiring 3/19/2027, with a strike price of $20
• Collect roughly $74 in premium per contract (each contract represents 100 shares)
• That’s about 4.1% annualized yield on the $2,000 you’re setting aside for the possibility of buying the stock
• This cash parked in a savings or money market account will earn an extra 4.0%, taking total yield to 8.1%
• And you give yourself a chance to buy CMCSA stock at deep discounted price of $20

However, this is not the only stock strategy in town. Trefis High Quality Portfolio is a sophisticated framework designed to reduce stock-specific risk while giving upside exposure.

Possible Trade Outcomes: You Win Either Way

Stock Price Outcome: What It Means For You

If CMCSA stays above $20, you keep the full $74 premium. That’s 3.7% extra income over the next 329 days on cash that might otherwise earn you 4.0% or less. You never buy the stock and simply walk away with the cash.

If CMCSA closes below $20, you’ll be obligated to buy 100 shares at $20. But thanks to $74 premium, your effective cost basis is just $19.265 per share – a roughly 30% discount from the current level.

And this is far from a speculative bet. Comcast’s business is anchored by its broadband infrastructure, which is a near-monopoly asset in most of its markets that continues to generate steady, predictable cash flows regardless of the economic cycle. Free cash flow stood at $19 billion over the last 12 months. See key cash flow metrics for Comcast versus peers such as Verizon (VZ), AT&T (T).

NBCUniversal and Peacock provide optionality on the streaming side, with Peacock growing its subscriber base and ad revenue steadily.

But to hold this trade with conviction, you want to see long-term upside in the stock. Because if it comes to it, you want to be excited about buying the stock cheap.

Check out Comcast Investment Highlights

If you are not comfortable with options or stock-specific trades, portfolios are the way to go, as they can protect and grow wealth even better.

Portfolios Beat Stock Picking

Single stocks can swing wildly, but staying invested matters. A well-built portfolio helps you stay invested, captures upside, and softens the blows from individual stocks.

Why settle for average market returns? The Trefis High Quality (HQ) Portfolio invests in a diverse group of 30 stocks that have collectively delivered stronger upside with reduced volatility compared to the broader indices. Discover the methodology behind these smoother, higher returns by checking the HQ Portfolio performance data.