2018 was a year of upheaval in the media industry. The trend toward cord-cutting and the increased use of over-the-top streaming services caused a media merger frenzy last year as companies looked to bulk up to compete. In 2019, investors may be wondering which new conglomerate is best-positioned to take on the brave new world of media.

For large-cap companies such as these, investors often place a premium on dividends, safety, and growth potential. One of the better-positioned on these fronts is Comcast (NASDAQ:CMCSA). In a difficult industry environment, Comcast's management has done an admirable job assembling a portfolio of assets that should keep the company's 2% dividend safe and growing.

A senior couple splashes happily in the ocean on a beach.

Comcast is the premier dividend growth media stock. Image source: Getty Images.

The dividend sweet spot

If you're in or nearing retirement, a company's dividend yield is likely a factor in your investment decision. However, if a company has too large a dividend, it could be a danger signal for the stock. As you can see, Comcast's dividend is at a pretty good sweet spot, around 2%.

CMCSA Dividend Yield (TTM) Chart

CMCSA Dividend Yield (TTM) data by YCharts

That yield is higher than those of many of its best-run peers, including Disney (NYSE:DIS) and CBS (NYSE: CBS). The two media companies with higher yields are AT&T (NYSE:T) and Viacom (NASDAQ: VIA) (NASDAQ: VIAB). AT&T is more of a mobile-first utility, and it pays a very high percentage of its net income out as a dividend. Meanwhile, Viacom has been beaten down thanks to its sub-scale, media-only portfolio, which is not especially well-positioned in today's world.

In contrast, Comcast has shown itself to be a steady grower, increasing its dividend each of the last 11 years and sextupling its payout since 2009. While it may be a stretch to see another six-fold dividend increase, the company looks set to grow its payout for the foreseeable future.

A well-supported yield

The first question dividend investors should ask is if a dividend is supported by the underlying economics of the business. On that front, Comcast delivers. The current $0.84 dividend is well-supported by a 28.5% payout ratio, meaning the dividend is covered almost four times over by profits. Those profits are also expected to grow this year and next.

CMCSA EPS Diluted (TTM) Chart

CMCSA EPS Diluted (TTM) data by YCharts

Comcast currently has three main segments:

  1. Broadband and Cable: Now includes a new mobile offering.
  2. NBCUniversal: Includes broadcast and cable networks, filmed entertainment, and theme parks.
  3. Sky: Comcast's new European acquisition, which is also comprised of broadband, cable, and media assets, which will likely merge with Comcast in various ways.

In 2018, Comcast grew cable and broadband services by 6.5%, the highest cable growth in 10 years, along with an even better adjusted EBITDA growth of 7.3%. NBCUniversal also had a strong year, growing revenue 7.3% and adjusted EBITDA 12.3%. Of note was a huge 109% surge in broadcast networks profits, as NBC abandoned Thursday Night Football in 2018 after broadcasting the extremely costly sports program in 2017.

Finally, Sky -- which just became part of Comcast in October -- also had a strong quarter, increasing revenue by 5.6% and adjusted EBITDA by 12.4% in Q4.

New products and services

Of course, a company doesn't get to be as large as Comcast without continuous evolution. 2018 saw not only the aforementioned $39 billion acquisition of Sky, but also the ramp of Comcast's new mobile service, construction of a new Universal theme park in Orlando, and the announcement of an upcoming NBCUniversal streaming service.

The company's most interesting innovations, in my mind, are the mobile offering and the new streaming service. Comcast's XFinity mobile service teams up with cable peer Charter Communications (NASDAQ:CHTR) and utilizes Verizon's (NYSE: VZ) network. On the recent call with analysts, management said Comcast reached 1.2 million mobile subscribers by year-end, and that it was "very pleased" with the results, noting the "best broadband retention on record." The mobile offering is a huge deal for Comcast -- though it's currently a loss-leader, the mobile offering is helping retain highly profitable broadband and cable video subscribers due to the bundling benefits.

Comcast's upcoming steaming service will also be interesting, as it will include new original shows alongside NBC-Universal's vast content library. The service will be available for free to cable subscribers with a "light" ad load, but will cost around $12 per month for non-cable subscribers.

The service is another incentive to subscribe to cable, but also grabs incremental revenue from cord-cutters. A third benefit: NBC will still continue to license content to third parties, so the new service should also strengthen its hand at the negotiating table.

Comcast has it all

For dividend growth investors, Comcast offers all one could want: a decent yield, strong growth, and innovative management. It's time to give it a look.