Comcast (CMCSA +0.84%) stands alone these days as the lone member of the Nasdaq-100 that's currently yielding more than a 10-year Treasury note. The media and connectivity giant's 5.8% yield is well ahead of the 10-year note, which last week hit 5% for only the second time in the last 20 years.
Comcast became the lone Nasdaq-100 component with a yield north of 5% a week ago, but it's not for the reason you might expect. A high-yielding stock didn't slash its dividend or get bumped off the list as a result of its own market cap shortcomings. Kraft Heinz transferred its common stock listing to the New York Stock Exchange, making it no longer a candidate for the Nasdaq-100, which tracks the 100 most valuable investments on that exchange.
Choosing the best stock currently yielding more than 5% is highly subjective. As a Comcast investor myself, I would have chosen it over the higher-yielding Kraft Heinz earlier this month. Let's dive in as the Comcast peacock shows off its train of iridescent feathers.
Image source: Getty Images.
The media is the message
Comcast stock is out of favor these days, shedding more than half of its value over the last five years. Healthy dividends in that time have offset some of that sting, but the country's leading cable TV and broadband provider remains a market laggard.
You don't have to look hard to find the culprit. This will be the fourth consecutive year that revenue failed to grow by at least 2%. Comcast has been shedding cable TV subscribers for years, but now it's seeing its once-steady internet connectivity business lose market share.
NASDAQ: CMCSA
Key Data Points
The past year has been particularly rough. Despite spinning off its Versant Media business back in December and planning to do the same with its larger NBCUniversal operations next year, Comcast stock has fallen 23% over the past year.
I like this setup. It's easy to dislike Comcast's Xfinity cable TV business in this golden age of cord-cutting, but it remains a cash cow. There is a bit more stability in its broadband business, even as it now faces off against aggressive wireless carriers offering in-home and in-business online access.
What I really like here is NBCUniversal and its eventual spinoff. This segment naturally covers its broadcasting and movie studio businesses, but it's even better.
Last year's Versant spinoff included many of its lagging linear networks as well as its Fandango and Rotten Tomatoes online platforms. What's left of NBCUniversal is its thriving theme parks, a movie studio that has already released two movies this year that topped $1 billion in worldwide ticket sales, and its now-profitable Peacock streaming service.
Sure, you can wait until NBCUniversal goes public as a stand-alone company in 2027. I think Comcast's value will be higher by then. Comcast is trading for less than 7 times forward earnings, and you're getting a 5.8% dividend yield as a reward for your patience.
Did I mention that Comcast has delivered 18 consecutive years of increasing distributions? Fan those feathers, Comcast, even if nobody is watching right now.
