Each quarter, we take a look at the recent transactions of some of the top money managers around today--who we call our Ultimate Stock-Pickers. Today, we're focusing on the two dividend-paying stocks that are the most widely held among these top managers.
Seventeen of our managers own Comcast. We believe Comcast possesses a wide economic moat, largely resulting from the strength of its core cable business. The majority of U.S. homes today can receive fixed-line Internet access service from only two providers: the traditional cable or phone company. Across nearly half of the U.S., that cable company is Comcast. The cost to enter this market is enormous. While technological developments have made it possible to build more efficient and reliable networks than legacy providers possess, deploying these technologies still requires heavy construction spending, while also overcoming the regulatory hurdles that municipalities often impose. With a network that can be upgraded at modest incremental cost, we expect Internet access share will continue to shift in Comcast's favor, enabling the firm to gain additional scale efficiencies. The high margins on Internet access should offset the decline in the traditional television business, where margins have plunged in recent years. We think Comcast's shares are fairly valued today.
Fourteen of our Ultimate Stock-Pickers own Bank of America. We assign Bank of America a wide economic moat rating. Bank of America is the second-largest U.S. money-center bank by assets and tends to have leading share and operations in many of the areas it competes. It's one of the top deposit gatherers in the U.S. and has top-two share in retail mortgages, home equity lines of credit, and small-business lending, as well as one of the top corporate franchises in the U.S. The bank also has one of the largest online retail brokerages in Merrill Edge and one of the largest advisor forces through Merrill Lynch Wealth Management. Overall, we believe the bank's key advantage comes from its scale in certain fixed-cost, fixed-platform businesses and the breadth of products it can offer to clients. This contributes to economies of scale and economies of scope and can create switching costs for customers as they use the bank for more and more products. We think shares of Bank of America are fairly valued.
Associate equity analyst Malik Ahmed Khan, senior analyst Eric Compton, and director Michael Hodel contributed the research behind this segment.