Updated 3/6/25
Comcast Corporation (NASDAQ: CMCSA) is a household name in the media and telecommunications world. As the parent company of NBCUniversal and the owner of Xfinity, it has built a vast empire that touches everything from broadband and cable TV to streaming and content production. It’s a company that has been around for decades, evolving with technology and consumer trends.
For dividend investors, Comcast is an interesting case. It’s a business that generates billions in cash every year, has a long history of rewarding shareholders, and still has room to grow. But does it check all the right boxes for long-term income seekers? Let’s break it down.
Key Dividend Metrics
📌 Forward Dividend Yield: 3.64%
💰 Annual Dividend: $1.32 per share
📈 5-Year Average Dividend Yield: 2.46%
💵 Payout Ratio: 22.46% (plenty of room for growth)
📆 Next Dividend Payment: April 23, 2025
🚨 Ex-Dividend Date: April 2, 2025
🔄 Dividend Growth Streak: Over 15 years
Dividend Overview
Comcast offers a forward dividend yield of 3.64%, making it a solid choice for income investors. Compared to its five-year average of 2.46%, today’s yield is looking even better, partly because the stock has seen some recent price declines. That’s not necessarily a bad thing—if anything, it means investors can lock in a higher yield right now.
The company pays out just 22.46% of its earnings in dividends, which is very conservative. This low payout ratio means Comcast has plenty of room to keep increasing dividends over time, even if earnings slow down. Some companies pay out 50% or more of their earnings, leaving little flexibility. Comcast doesn’t have that problem.
If you want to capture the next dividend, make sure to own shares before April 2, 2025, since that’s the ex-dividend date. The actual payout lands on April 23.
Dividend Growth and Safety
One of the best things about Comcast’s dividend is that it keeps growing. The company has been raising its payout for more than 15 years, and given its strong free cash flow, there’s no reason to believe that will stop anytime soon.
The payout ratio is key here. With just 22.46% of earnings going toward dividends, Comcast has a huge cushion to continue increasing payouts while still reinvesting in its business. This is the kind of stability income investors love to see.
Another reason the dividend looks safe is the company’s ability to generate cash. Comcast pulled in $27.67 billion in operating cash flow over the last year. Even after capital expenses and other costs, it still had $7.66 billion in free cash flow left over. That’s a lot of excess cash that can go toward dividends, share buybacks, or debt reduction.
Unlike some high-yield stocks that are barely hanging on, Comcast’s dividend is backed by real earnings power and a strong business model.
Chart Analysis
Price Action
The chart shows Comcast (CMCSA) in a clear downtrend over the past several months, with a notable decline from its highs above $45 to recent lows near $32.50. While the stock has rebounded from those lows, it remains below both the 50-day and 200-day moving averages, suggesting that the broader trend is still weak.
The latest price action indicates some stabilization, with the stock closing at $36.27. There have been several higher lows recently, which could be an early sign of recovery. However, the 50-day moving average continues to slope downward, and the stock is struggling to reclaim it.
Moving Averages
The 50-day moving average (orange line) has crossed below the 200-day moving average (blue line), forming a death cross—a technical signal that often points to continued downside momentum. This crossover happened a few months ago, and since then, the stock has struggled to regain its footing.
Currently, the price is hovering just below the 50-day moving average. If CMCSA can break above it and hold, that could shift sentiment and bring in more buyers. However, the 200-day moving average remains well above current levels, acting as a long-term resistance point.
Volume and Buying Interest
Volume spikes have been noticeable during large price moves, particularly in December and February. The December drop came on increased selling pressure, while the recent bounce in February also saw strong buying interest. The current volume levels suggest that traders are engaged, but it’s not showing an overwhelming surge of new buyers just yet.
A key level to watch would be whether volume picks up as the stock tests resistance near the 50-day moving average. If there’s a breakout with strong volume, it would indicate growing confidence in a potential trend reversal.
Relative Strength Index (RSI)
The RSI, plotted at the bottom of the chart, has been recovering from deeply oversold levels seen in early February. It is now moving toward neutral territory, suggesting that selling pressure has eased. The stock isn’t overbought or oversold at this point, meaning it has room to move in either direction.
A push above the 50 mark on the RSI could indicate growing momentum, while a rejection from this level might signal another pullback in the stock.
Analyst Ratings
Comcast Corporation (NASDAQ: CMCSA) has recently experienced a mix of analyst upgrades and downgrades, reflecting diverse perspectives on the company’s performance and future prospects.
Downgrades
In late January 2025, Bank of America adjusted its stance on Comcast, moving from a “buy” to a “neutral” rating. This change was accompanied by a reduction in the price target to $38. The primary concern cited was the anticipated decline in residential broadband subscribers, with projections indicating a net loss of subscribers in 2025, a steeper decline than previously estimated. This expected downturn in broadband subscriptions raised alarms about potential revenue and EBITDA declines in Comcast’s Cable Communications segment.
Similarly, Scotiabank adjusted its outlook on Comcast in early February 2025, downgrading the stock from “sector outperform” to “sector perform.” The firm also lowered its price target to $44.50 from the previous $48. The downgrade was attributed to challenges in the broadband sector, including increased competition and subscriber losses, which could impact Comcast’s growth trajectory.
Upgrades
Conversely, some analysts have maintained or enhanced their positive outlook on Comcast. In late January 2025, Goldman Sachs reaffirmed its “buy” rating for the company, though it adjusted the price target downward to $44 from $50. The firm expressed confidence in Comcast’s diversified business model and its potential to navigate the evolving media landscape effectively.
Additionally, Evercore ISI upgraded Comcast to an “outperform” rating in late January 2025, reflecting optimism about the company’s strategic initiatives and resilience in a competitive market. This upgrade was based on expectations of growth in Comcast’s streaming services and theme park operations, which could offset challenges in the traditional cable segment.
Consensus Price Target
As of early March 2025, the consensus among 20 analysts is a “moderate buy” rating for Comcast, with an average twelve-month price target of approximately $43.83. This target suggests a potential upside of around 17.10% from the current stock price of $37.42. Price targets among analysts range from a low of $35 to a high of $55, indicating varied expectations about Comcast’s future performance.
These mixed analyst opinions underscore the complexities facing Comcast, balancing challenges in its broadband segment with opportunities in streaming and theme parks.
Earnings Report Summary
Comcast wrapped up the fourth quarter of 2024 with 31.9 billion dollars in revenue, a modest 2.1 percent increase from the previous year. While it wasn’t a blockbuster growth number, it was enough to bring full-year revenue to 123.7 billion dollars, edging up 1.8 percent from 2023.
One of the standout figures in the report was net income, which surged 46.6 percent year-over-year to 4.8 billion dollars for the quarter. That jump was largely driven by a 1.9 billion dollar tax benefit related to an internal restructuring. Taking out one-time items, adjusted net income still climbed 8.3 percent to 3.7 billion dollars. Over the full year, net income landed at 16.2 billion dollars, up 5.2 percent from the prior year.
Earnings per share also saw a big jump. Comcast reported 1.24 dollars per share, up from 0.81 dollars in the same period last year, a 54.1 percent increase. Adjusted earnings per share, which smooths out fluctuations from special items, rose 13.9 percent to 0.96 dollars. For the full year, adjusted earnings per share came in at 4.33 dollars, an increase of 9.0 percent.
The company’s adjusted earnings before interest, taxes, depreciation, and amortization hit 8.8 billion dollars for the quarter, marking a 9.9 percent increase. Over the course of the year, EBITDA rose 1.2 percent to 38.1 billion dollars. These solid earnings metrics show that Comcast remains a cash-generating machine, even as some areas of the business face headwinds.
One of those headwinds is broadband subscriber losses. The company saw 139,000 fewer domestic broadband subscribers, a sharper decline than analysts had expected. This has been an ongoing issue as competition in the broadband space heats up and consumer habits shift. While the broadband business is still highly profitable, these declines are something investors are watching closely.
On the flip side, Comcast’s entertainment division had a strong quarter. The release of Wicked, starring Ariana Grande and Cynthia Erivo, was a major success, bringing in 114 million dollars in its opening weekend and driving a 7 percent jump in studio revenue to 3.27 billion dollars. The impact on profits was even stronger, with adjusted EBITDA for the studio segment soaring 85 percent to 569 million dollars.
Meanwhile, the Peacock streaming service continues to gain traction. While not yet a dominant force in the streaming wars, it remains a key part of Comcast’s growth strategy. All in all, it was a mixed earnings report, solid financials, strength in media, but continued pressure on broadband.
Financial Health and Stability
Comcast is a money-making machine, but it does come with some financial baggage. The company has a lot of debt—$105.41 billion, to be exact—which results in a debt-to-equity ratio of 122.18%. That’s high, even for a company in the telecom and media space. However, the business consistently generates enough cash to cover interest payments and keep operations running smoothly.
The company’s profit margins are solid, with an operating margin of 15.65% and a net profit margin of 13.09%. Return on equity stands at 18.71%, which signals that Comcast is effectively using shareholder capital to generate profits.
The one area where Comcast could improve is its short-term liquidity. With a current ratio of 0.68, the company doesn’t have a huge cash cushion to cover short-term obligations. That said, its steady cash flow generation offsets most concerns about liquidity.
Valuation and Stock Performance
Comcast’s stock has been under some pressure lately, trading between $32.50 and $45.31 over the past year. At its current price of $37.28, it’s sitting below its 200-day moving average of $39.24, suggesting it’s still in a bit of a slump.
From a valuation perspective, the stock looks cheap. It’s trading at a trailing price-to-earnings ratio of 8.76 and a forward P/E of 8.55. These numbers are well below market averages, signaling potential value for long-term investors.
Other valuation metrics confirm the stock isn’t expensive:
- Price-to-sales ratio of 1.15
- Enterprise value to EBITDA of 6.09
For a company with stable cash flows and a long dividend history, these numbers suggest the stock might be undervalued.
Another thing to note: Comcast’s stock isn’t overly volatile. With a beta of 1.01, it moves roughly in line with the broader market. That makes it a relatively stable holding for investors looking for consistent returns.
Risks and Considerations
No stock is perfect, and Comcast has its fair share of challenges.
1️⃣ Cord-Cutting Trends: Traditional cable TV is declining as more consumers switch to streaming. Comcast has hedged its bets with Peacock, but streaming is a lower-margin business than cable.
2️⃣ Broadband Competition: While Comcast is a leader in home internet, competition is heating up. Fiber-optic providers and 5G home internet could challenge its market dominance.
3️⃣ High Debt: The company’s $105.41 billion debt load is worth watching. Rising interest rates could make refinancing more expensive in the future.
4️⃣ Regulatory Challenges: As a major media and telecom player, Comcast is always under regulatory scrutiny. Any changes in rules around net neutrality, pricing, or mergers could impact operations.
5️⃣ Streaming Profitability: While Peacock has seen growth, making money in the streaming business is tough. If it continues to operate at a loss, it could drag down overall profitability.
Final Thoughts
For dividend investors, Comcast checks a lot of boxes. It offers a solid 3.64% yield, a long history of dividend growth, and strong free cash flow to back up future payouts. With a low payout ratio and an attractive valuation, the company looks well-positioned to continue rewarding shareholders.
That said, it’s not without risks. The cable TV business is shrinking, broadband competition is heating up, and the company carries a lot of debt. Still, Comcast has a diversified revenue stream, and its steady cash flow provides a layer of protection against industry challenges.
For those looking for a mix of income and long-term potential, Comcast remains a strong dividend payer in the media and telecom space.
Recent Comments