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Comcast Shares Most Attractive in Telecom

Comcast turned in yet another solid quarterly performance, as the cable business continues to improve customer growth, says Morningstar's Michael Hodel.

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It's hard to find much to complain about in  Comcast's (CMCSA) (CMCSK) third-quarter results. The cable business continues to improve customer growth, while NBCU posted strong results across most segments. We view the shares as the most attractive investment in a generally overvalued U.S. telecom universe.

Comcast continued its run of steady improvement in television customer losses and Internet access customer gains during the third quarter. The firm lost 117,000 television customers during the period, its best third-quarter performance since 2007, and added 287,000 net new Internet access customers, up 10% versus a year ago. The Internet access growth figure is especially impressive given that both 
 AT&T (T) and  Verizon Communications (VZ) actually lost net customers during the quarter. We continue to believe that Comcast and its cable peers are very well positioned to continue gaining share in the residential market. The firm also continues to gain share in commercial services, with revenue in this segment growing 34% versus a year ago, and the political advertising season has added another boost to cable revenue growth. Comcast's total cable revenue increased 6.9% versus a year ago, the fastest pace since 2008. 

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Michael Hodel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.