With Strong Cash Flow, Comcast Stock Poised to Rise?
Comcast (CMCSA) could be a good pick for your portfolio, with its high cash yield, good fundamentals, and discounted valuation. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market
CMCSA Has Good Fundamentals
- Good Cash Yield: Not many stocks offer free cash flow yield of 18.2%, but Comcast stock does
- Strong Margin: Last 12 month operating margin of 15.3%
- Growth: Last 12 revenue growth of 1.4% – low growth, but this selection is all about high yield and margin
- Valuation: CMCSA stock currently trading at 32% below 2Y high, 14% below 1M high, and at a PS lower than 3Y average.
Below is a quick comparison of CMCSA fundamentals with S&P medians.
| CMCSA | S&P Median | |
|---|---|---|
| Sector | Communication Services | – |
| Industry | Cable & Satellite | – |
| Free Cash Flow Yield | 18.2% | 4.4% |
| Revenue Growth LTM | 1.4% | 6.9% |
| Revenue Growth 3YAVG | 1.4% | 5.6% |
| Operating Margin LTM | 15.3% | 18.5% |
| Operating Margin 3YAVG | 17.8% | 18.3% |
| PE Ratio | 5.2 | 23.8 |
*LTM: Last Twelve Months
- Buying CMCSA At A Discount And Getting Paid To Do It
- Comcast Stock Shares $24 Bil Success With Investors
- With Strong Cash Flow, Comcast Stock Poised to Rise?
- Strong Cash Yield: Is Comcast Stock A Buy?
- Comcast Stock Pullback: A Chance to Ride the Uptrend
- Comcast Stock Pullback: A Chance to Ride the Uptrend
But What Is The Risk Involved?
While CMCSA stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. Comcast slid 44% in the Dot-Com crash, 62% during the Global Financial Crisis, and 52% in the inflation shock. Even the milder pullbacks — like 2018 and the Covid selloff — hit around 28-31%. Solid fundamentals only go so far. When markets turn sour, big dips still happen.
For more details and our view, see Buy or Sell CMCSA Stock.
Stocks Like CMCSA
Not ready to act on CMCSA? Consider these alternatives:
We chose these stocks using the following criteria:
- Greater than $2 Bil in market cap
- Dipped last month & meaningfully below 2Y high
- Current P/S < last few year average
- Strong operating margin with no instances of large margin collapse
- High free cash flow yield
A portfolio of stocks with the criteria above would have performed has follows since 12/31/2016:
- Average 6-month and 12-month forward returns of 10.4% and 20.4% respectively
- Win rate (percentage of picks returning positive) of about 74% for 12-month period
- Strategy consistent across market cycles
Portfolios Over Individual Stock Picks
Individual stocks can soar or tank, but one thing matters: staying invested. The right portfolio can help you stay invested, capture upside, and mitigate the downside associated with any individual stock.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? HQ Portfolio has posted more than 105% in cumulative return since inception, with less risk versus the benchmark index, as evident in HQ Portfolio performance metrics.