TV content has never been more valuable, a reality that's making Comcast's (CMCSA +1.10%, news) takeover ofNBCUniversal look like one of the shrewder corporate deals of recent history.
Advertisers bought a record $63 billion of TV time last year, Barron's reported, citing data from Magna Global. And content owners last year received $43 billion in payments from pay TV providers.
Comcast, as operator of the nation's largest cable network, is one of those providers. But payouts from the company's cable business is at least partially offset by its share of the proceeds paid to the Big 4 TV networks by the likes of DirecTV (DTV +0.70%, news) and Time Warner Cable (TWC +0.59%, news).
And the record revenue is helping Comcast underwrite new initiatives designed to fend off digital upstarts likeNetflix (NFLX +1.47%, news) that offer viewers an alternative path to popular movies and TV shows..
Comcast last year began rolling out its X1 interface designed to make it easier for cable customers to find individual shows and movies and to replicate some of the navigational tools featured by Netflix. X1 users are viewing 20% more video-on-demand content, Comcast officials have said.
The Philadelphia company appears on a daily list created using StockScouter, an MSN Money tool that identifies stocks with strong growth prospects in the near term. All stocks with Scouter ratings of 8, 9 or 10 are considered for the list, which is then shortened to exclude those with a trading volume of less than 50,000 shares a day. The remaining stocks are ranked on the basis of market capitalization, sector membership and whether they are growth or value stocks.
Comcast derives most of its revenue from its cable services, offered in 39 states and the District of Columbia. Its Cable Communications unit serves residential and business customers with video (22 million subscribers), high-speed Internet (18 million subscribers) and voice services (9 million subscribers). Other operating segments include cable networks, broadcast television, filmed entertainment and theme parks.
The importance of NBCUniversal was underscored in the company's latest earnings report, issued July 31. Comcast's second-quarter profit rose 29%, with the media and entertainment properties contributing more to the bottom line than analysts were expecting.
Comcast completed its takeover of NBCUniversal in March, buying out General Electric's (GE -0.29%, news) 49% stake in the venture for $16.7 billion.
NBCUniversal revenue rose 8.9% to $6 billion in the period, thanks in large part to the NBC network's 13% gain in advertising revenue, boosted by improved primetime ratings driven by the success of its hit singing competition show "The Voice" and other programs. NBCUniversal comprises the NBC broadcast network, cable networks including MSNBC, CNBC, E! and Bravo, Universal Pictures and Universal theme parks in Orlando, Fla., and Hollywood, Calif.
Higher distribution fees and increased advertising revenue lifted Comcast's profitable cable television unit, which includes MSNBC, Bravo, USA Networks and NBC Sports. Second-quarter revenue was up 7.7% at the unit.
Universal Pictures, headquartered in Los Angeles, posted a 12.8% rise in revenue for the three months through June, with profits fueled by "Fast and Furious 6" as well as an increase in licensing revenue from movies sold to international TV networks.
NBUniversal executives are particularly excited about "Despicable Me 2," a film that had its debut in the current quarter and is projected to become the most profitable movie in the 100-year history of Universal Pictures.
Read the full StockScouter report for Comcast here.
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StockScouter top 10
for Sept. 13
|
||||
|
Company
|
Sector
|
Dividend yield
|
Forward P/E
|
Scouter score
|
|
Personal technology
|
2.5%
|
10.7
|
10
|
|
|
Apparel retail
|
3.4%
|
12.4
|
10
|
|
|
Software
|
N/A
|
13.4
|
10
|
|
|
Oil and natural gas
|
N/A
|
14.0
|
10
|
|
|
Video games
|
1.1%
|
13.0
|
10
|
|
|
Pay TV
|
1.8%
|
14.6
|
10
|
|
|
Resorts, casinos
|
2.2%
|
18.5
|
10
|
|
|
Data storage
|
1.4%
|
14.4
|
10
|
|
|
TJX (TJX
+0.22%,news)
|
Apparel stores
|
1.1%
|
16.5
|
10
|
|
Semiconductors
|
2.8%
|
18.1
|
10
|
|
Here at MSN Money, we think our StockScouter rating system is about as good as it gets when you're trying to decide where to invest.StockScouter beats the market
StockScouter looks for stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price in the future, based on how those factors have influenced stock prices in the past.
The system assigns each stock an expected six-month return and balances that return against the stock's expected volatility.
Scouter rates stocks on a scale of 1 to 10, and ratings can change daily. Ratings and data in the chart above were current as of this article's publication date.
In addition to the daily top 10 list described above, StockScouter is used by investment research firm Verus Analytics (previously known as the quantitative business unit of Gradient Analytics) to generate a monthly benchmark portfolio of stocks that, refreshed monthly, has outperformed the market since its inception in August 2001.
An investor who began in 2001 by investing in each of the benchmark portfolio's top 10 stocks at the start of the month, selling them at the end of the month and then starting fresh with a new group of 10 stocks, would have generated returns, before trading costs and taxes, of 915% through Aug. 31, 2013.
Writer Jon Markman, at the time a columnist for MSN Money, collaborated with company researchers on the tool.
Markman suggested rolling over the top 10 stocks every six months to hold down trading costs, a strategy that might be a better fit for most investors; that would yield different results, which would vary based on your starting point.
Performance through Aug. 31 | ||||||
Full 50 position portfolio
| ||||||
Index
|
1 month
|
3 month
|
6 month
|
1 year
|
Since inception
|
Average annual return
|
Portfolio
|
-3.7%
|
5.3%
|
4.3%
|
18.0%
|
492%
|
16,5%
|
Nasdaq
|
-1.0%
|
3.9%
|
13.6%
|
17.1%
|
77%
|
6.9%
|
S&P 500
|
-3.1%
|
0.1%
|
7.8%
|
16.1%
|
35%
|
3.7%
|
DJIA
|
-4.5%
|
-2.0%
|
5.4%
|
13.1%
|
41%
|
4.0%
|
Top 10 portfolio
| ||||||
Index
|
1 month
|
3 month
|
6 month
|
1 year
|
Since inception
|
Average annual return
|
Portfolio
|
-3.6%
|
2.6%
|
0.6%
|
5.9%
|
915%
|
21.0%
|
Nasdaq
|
-1.0
|
3.9%
|
13.6%
|
17.1%
|
77%
|
6.9%
|
S&P 500
|
-3.1%
|
0.1%
|
7.8%
|
16.1%
|
35%
|
3.7%
|
DJIA
|
-4.5%
|
-2.0%
|
5.4%
|
13.1%
|
41%
|
4.0%
|
Inception: August 2001
| ||||||
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