A Sensible Stock for the Times

With the market all too often resembling a kamikaze dive these days, it's vital that capital preservation move into the lead spot in investors' hearts. Appreciation is nice -- after all, isn't that why we're in the world of equities? -- but in defensive times like these, keeping one's wad intact becomes of even greater importance.

So what's an investor to do to both guard the nest egg, while retaining an opportunity for growth? For my money, a sensible name to consider for inclusion in your portfolio is none other than cable industry leader Comcast (Nasdaq: CMCSA  ) . Here's a sample of why I feel that way:

  • The company boasts a solid collection of 24 million subscribers and is the proud owner of such content properties as The Golf Channel. (Any friend of The Golf Channel is a friend of mine.)
  • Its management, led by CEO Brian Roberts, is as solid as any I've looked at, regardless of industry, in my investment career.
  • Comcast continues to add subscribers to all three of its triple-play services. In fact, its telephone revenue jumped by 65% in the most recent quarter.
  • Management has kept the debt level down, thereby leaving it room to finance wireless services, and thus to turn the triple play into a quadruple play (which even my Red Sox have never pulled off).
  • The company is the only cable entity that'll toss a dividend in your direction every quarter.

Comcast has been essentially flat since the beginning of 2008. But that beats its peers. Time Warner Cable (NYSE: TWC  ) is down 5%, Cablevision (NYSE: CVC  ) has slid by 8%, and Charter (Nasdaq: CHTR  ) is lower by 8% but has fallen by about 80% since last July. Comcast also tops the share-price performance of Verizon (NYSE: VZ  ) -- its closest rival on the telco side -- which has shed around 20% in 2008.

As I look at financial comparisons between Comcast and its peers, the company beats Time Warner Cable and Cablevision in both operating and net-profit margins. Further, its management has shown itself better able to retain its focus on its core business than has the Dolan family at Cablevision. And you probably wouldn't want to lug around the debt that Time Warner Cable will be toting once it's liberated from Time Warner (NYSE: TWX  ) .

With all of this in mind, I'm inclined to channel a solid portion of my investment attention to this cable kingpin. Preservation, after all, is the name of the game.

Time Warner is a Motley Fool Stock Advisor recommendation. Try the market-beating investment service free for 30 days.

Fool contributor David Lee Smith doesn't own shares in any of the companies mentioned above. He does, however, welcome your questions or comments. The Fool's disclosure policy is capable of executing a quintuple play.

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10/21/2016 4:00 PM
CMCSA $64.06 Down -0.29 -0.45%
Comcast CAPS Rating: ***
CHTR $255.06 Down -3.06 -1.19%
Charter Communicat… CAPS Rating: *
CVC.DL $0.00 Down +0.00 +0.00%
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TWC.DL $0.00 Down +0.00 +0.00%
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TWX $89.48 Up +6.49 +7.82%
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