Comcast: Stock and Dividend Analysis

Even though this website is called Canadian Dividend Investing, your author is probably more interested in U.S. stocks these days.

With a few exceptions, Canadian stocks have had one hell of an 2+ year run. The TSX bottomed in October 2023 and has pretty much gone up and to the right ever since. Periods of instability — like in April, 2025 — were quickly forgotten as investors continued to pile into most of Canada’s top stocks.

A chart of the S&P 500 looks pretty similar, but the advantage to looking across the border is there’s more choice in the United States. It isn’t just U.S. companies that trade on the NYSE or NASDAQ either — most every worldwide company of size chooses to list their shares on one of the major U.S. exchanges. And a lot of worldwide small caps trade on the OTC exchange, for those of you who are hardcore about such things.

When you’re picking from a pool of thousands of stocks versus a few hundred, you’ll naturally find more choices.

Let’s take a closer look at one of these choices today, Comcast Corporation (NASDAQ:CMCSA), a telecom/media behemoth that quietly offers nice value, a robust share buyback, an underrated dividend, and some excellent hidden assets.

The skinny

Comcast Corporation is a member of the NASDAQ 100, which consists of the 100 largest stocks that trade on the exchange. It’s a big company but everything is divided into just two divisions.

The largest is Connectivity and Platforms, which includes the company’s wireline and wireless telecom services. Operating under the Xfinty brand, Comcast offers cable, internet, home phone, security, and wireless services to many parts of the United States.

Wireless coverage extends pretty much everywhere in the lower 48 states, while wireline services are a little more patchy. Still, Comcast is the largest provider of such services in the U.S., and the gaps in coverage represent potential acquisition opportunities in the future.

As you can see with the coverage map, Comcast is a main player in an awful lot of major U.S. cities. This bodes well as more folks move from rural to urban America, and most immigrants end up settling in larger centers.

This part of the business is struggling a little bit. In the most recent quarter, revenue dropped from $20.5B to $20.2B, with adjusted EBITDA falling from $7.8B to $7.5B. There’s a telecom price war going on throughout much of the United States as various players are looking for a return on investment after making costly upgrades.

This is the nature of the telecom business. Once the lines have been laid, any new customers that get acquired represent almost pure profit. So they offer special introductory rates. Competitors do the same, and so savvy consumers switch — or at least threaten to switch. This keeps rates low and forces companies like Comcast to increase profits by two ways:

• Acquire new customers (either from population growth or from competitors)

• Cut costs

In an effort to reduce churn, Comcast has been trying a few different things. It has simplified its wireline internet offering, letting customers choose from four different speed tiers. And it promises a five-year price lock guarantee, allowing consumers to not have to worry about surprise rate hikes until 2031. The company is also tailoring its promotional efforts to each individual market — for instance, higher net worth households are getting promo offers for higher speeds, while lower net worth householders are getting more value-driven offers.

Still, the telecom business is a good one, featuring a 37% adjusted EBITDA margin. Services to businesses have even higher margins, and that part of the business is growing.

Up next is Content and Experiences, which includes:

• Universal theme parks

• Movie Studios (including Universal, Illumination, and Dreamworks)

• Peacock streaming service

• NBC

We’ll note that Comcast just spun off many of its cable assets into Versant (NASDAQ:VSNT), including properties like CNBC, MSNBC (now called MS NOW), USA, The Golf Channel, and more. Despite these media assets earning a projected $1.4B in free cash flow in 2025 (4th quarter results aren’t in yet, but that number should be pretty close), shares have a market cap of just over $4B.

It looks to be a bit of a melting ice cube so it’s not for me, but it might be of interest for some of you.

The reason why Comcast spun off the cable part of the business is because the company felt that investor focus on Content and Experiences was too centered on the shrinking cable part, rather than the good parts of the business.

Theme Parks is quietly a fantastic business. Revenue grew by 22% compared to the same quarter as last year, buoyed by a new park opening in Orlando. Quarterly EBITDA surpassed $1B for the first time.

Movie Studios is more of a boom/bust business. Results were down compared to Q4 2025, but that was because the first Wicked movie did so well compared to the sequel.

Finally, we have the Media division, which includes NBC and Peacock. Peacock is currently losing money, but losses are improving. Growth is also impressive, with the top line increasing by 23% versus the same quarter last year.

Put it all together, and Content and Experiences is growing the top line nicely, but the bottom line has been falling.

We’ll note that Q4 was a bit of a soft quarter, and full-year results are better. Revenue stayed steady at just under $124B in 2025, with adjusted EBITDA falling just 1.8% to $37.4B. Earnings fell by just 0.6% to $4.31 per share. Free cash flow checked in at $19.2B, which is comfortably over $5 per share.

Not bad for a company currently trading right around $31.

There are potential short-term catalysts, too. NBC should get a nice little boost in the quarter from having both the Super Bowl and the Winter Olympics. Much anticipated sequels to the Super Mario and Minions movies will be out this year. The theme parks division is opening a new park in Texas. On the negative side, FCF was positively impacted by about $2B from a one-time tax benefit. So that number will likely go down next year, but should still be robust.

Finally, let’s look closer at the balance sheet. Comcast owes about $95B in net debt, which seems like a high number. But remember, the company generated $37B in adjusted EBITDA in 2025. That puts the debt-to-EBITDA ratio at well under 3x, which is better than many of its competitors — including every telecom in Canada. That includes Cogeco (TSX:CCA)(TSX:CGO) and Quebecor (TSX:QBR.B), which both offer debt-to-EBITDA ratios in the low 3x range.

The opportunity

The opportunity here is simple. You have a business that is a combination of:

• Telecom utility (everyone has to have internet/cell coverage)

• Theme parks

• A streaming platform

• A huge amount of content in the ol’ archives

Which is trading for a single digit P/E ratio. Most of these businesses separated out on their own would trade for much higher valuations.

This creates an opportunity for shares to go higher for multiple reasons. Perhaps the business improves. Perhaps value investors push shares higher. Maybe investors turn away from tech and buy unloved old school assets again. Or maybe a combination of the above factors plus the aggressive share buyback actually goose the top and bottom lines on a per share basis.

Either way, there are plenty of eventual catalysts. And in the meantime, investors get paid a generous dividend while they wait.

I like to look at two general metrics when it comes to valuation. The first one is comparing the current dividend yield to the average. And then I do the same for valuation.

Let’s start with the dividend. Comcast is offering a 4%+ yield today, much higher than the 2.5% mean yield that is has offered over the last decade.

Shares are also extremely cheap based on price-to-free cash flow. The mean here is a hair over 14x FCF versus the current valuation of just over 8x FCF. If Comcast can return to its mean valuation over the last decade, shares would trade for more than $53 each.

No method is foolproof, of course, but I find good things tend to happen when you buy cheap dividend stocks with good balance sheets.

Dividends and buybacks

As always, let’s start first with the buyback. Comcast has been quietly buying back a lot of shares, and has been doing so for most of the last decade.

At the end of 2016, the company had approximately 4.8B shares outstanding. That number fell to just under 3.6B currently, a decrease of 1.2B shares. Or about 25% of shares outstanding. Not bad.

Share repurchases have also picked up in the last few years as the stock has sold off. In 2021, when shares peaked at more than $60 each, the company wasn’t very active on the buyback front. It has since ramped up the buyback as shares fell, which is exactly what you’re supposed to do.

Comcast has also been a steady dividend raiser. It has increased the payout from $0.55 to $1.32 per share over the last decade, a 140% increase. Not bad.

When you put the dividend and the buyback together, Comcast is returning more than $3 per share back to shareholders each year.

($11.7B works out to about $3.25 per share)

Comcast has already told investors it doesn’t plan to increase the dividend in 2026, suggesting that the Versant spinoff is sort of like a dividend increase. I believe that management is more inclined to focus on buybacks with the shares trading at such an attractive valuation, and I don’t blame them.

Dividend growth should resume at some point in the future, probably in 2027. With Comcast projected to earn $3.68 per share in 2026 and a dividend of $1.32 per share, that gives us a very comfortable 35% payout ratio. And the company can always dial back the buyback if needed in order to better afford the dividend.

I don’t think y’all need to worry about the dividend. This payout is not only secure, but it should grow again, and maybe even as soon as 2027.

Dividend growth potential: 3-6%
Dividend safety: high

The bottom line

Ultimately, Comcast is an unloved asset. Wireline telecos are hated on both sides of the border as investors assume the current price wars will continue forever, and Comcast will lose business to various upstart competitors.

I look at the company and I see a bunch of interesting assets. Peacock is growing like crazy and should be profitable in a few years. The telecom part of the business gushes cash. Theme parks is quietly an excellent business. Studios have the potential to shine again. And NBC’s emphasis on sports is a good thing.

Shares are also cheap, trading at just 8x forward earnings and offering a 4%+ dividend yield. Both of these metrics suggest a cheap valuation, yet analysts predict that earnings will grow in 2027 and 2028. Growth and value is a powerful combination.

The only issue for Canadian investors is converting our loonies to greenbacks and the lack of dividend tax credit. Perhaps this is one that readers stick in their RRSP.

Your author has no position in Comcast, but is considering one. None of this is financial advice, it is for research and educational purposes only.