Comcast Corporation (CMCSA) is the world’s largest broadcasting and cable corporation. In the United States, Comcast is the largest provider of cable television and home Internet service. For years, it was the largest pay TV company in the world, but it fell to second following the AT&T-DirecTV merger.
The company had its initial public offering (IPO) on June 29, 1972. At that time, Comcast was a relatively small and obscure cable TV company with only 40,000 subscribers. The IPO was priced at $7 per share. If you had invested in Comcast at the IPO or right after, you would likely be very wealthy today. Comcast has six stock splits. A $1,000 investment on the IPO date would be worth $1.06 million as of June 2018 – and this amount assumes you did not reinvest dividends into buying more Comcast stock.
Comcast started as a small cable provider called American Cable Systems, based out of Tupelo, Mississippi. The company incorporated as Comcast in 1969 and then went public in 1972. In 1977, Comcast first partnered with HBO to offer premium TV service in western Pennsylvania. In 1986, the company made a founding investment in QVC, a televised home shopping network.
The company’s market share really took off during the 1990s. That decade saw Comcast make a series of auspicious acquisitions that pushed it into the top echelon of U.S. cable providers. In 2001, Comcast officially became the largest cable provider in the U.S. when it purchased AT&T Broadband.
As of 2018, Comcast’s largest brand, and the one that generates the most revenue, is Xfinity, which provides cable TV, high-speed Internet and voice over Internet protocol (VOIP) services. The company also has a business division and an enterprise division that provide the same services to small businesses and Fortune 1000 companies.
Comcast owns or partially owns dozens of networks and channels, such as the Golf Channel, NBC Sports Network and the MLB Network. The company also owns and operates local channels all across the country. In 1999, Comcast forayed into venture capital through its subsidiary, Comcast Ventures. The subsidiary backs several successful startup ventures, including the daily fantasy sports site FanDuel.
If you had invested $1,000 at Comcast’s IPO, it would have bought you just over 142 shares at $7 per share. As of June 2018, your shares would be worth $33.7 each, and you would own 32,748 of them. Comcast stock has split 12 times between 1972 and February 2017. Ten of those splits were three-for-two splits, meaning each stockholder got three shares for every two shares he owned. The remaining two splits were two-for-one. All told, if you held your Comcast investment through all 12 stock splits, you would have increased your share count by a staggering multiple of 230.
As a result, your shares would currently be worth close to $1.06 million (32,748 shares at $32.38 per share) as of June 12, 2018. Moreover, this amount assumes you took your dividends – which, in 2018, amounted to $0.38 per share so far– in cash, rather than reinvesting them in Comcast stock. Had you reinvested your dividends, you would have earned even more from your Comcast investment.
As of June 2018, Comcast’s fundamentals look strong. The company reported better-than-expected earnings in the first quarter of 2018, with $22.791 billion in revenue and a net increase of 379,000 high-speed internet customers. Comcast stock is valued appropriately for the company’s industry and size, with a price-to-earnings (P/E) ratio of 6.73.
The stock itself performed reasonably in 2017, and generally followed the trend for stocks across the board. The share price dipped in the September, October, and November, but returned to mid-year levels in December.
Following Judge Richard Leon’s decision to clear AT&T Inc’s bid for Time Warner Inc. on June 12, 2018, many have speculated potential mergers that might begin soon. Comcast is likely to submit a bid for most of Twenty-First Century Fox Inc (FOXA). Doing so would challenge Disney, as it has already submitted its own $52.4 billion bid for the same assets.