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3 Cable Companies America Hates the Most and 1 You Love

By Rich Smith - Apr 3, 2013 at 2:54PM

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Which one comes out on top? And how does its stock stack up?

This article was updated on November 13, 2014.

The results are in. After polling its readers -- daily evaluators of the relative "goodness" of products -- Consumer Reports has revealed which cable TV companies are the most hated in America, and which one actually might be worth a try. 

Worst of the worst
I won't keep you waiting for the results. For the second year in a row, privately owned (and redundantly named) Mediacom Communications comes in at the very bottom of the list of 17 rated cable TV companies. It's preceded by a pair of publicly traded firms that were rated only marginally better for quality: Comcast (CMCSA 0.39%) and Time Warner Cable (NYSE: TWC), ranked Nos. 15 and 16, respectively.

All three of these cable companies earn Consumer Reports' absolute worst rating for the "value" of the service they provide -- a big black circle. (Indeed, Mediacom gets more fully blackened circles than anyone else, scoring unacceptably in four out of six categories rated.) Meanwhile, Chomcast and Time Warner -- who are trying to merge into a single cable company by the way -- both earn CR's only marginally acceptable "empty circle" ratings in three of the six categories rated, and dismal half-black semicircle ratings for two more categories.

In case you're wondering, on top of providing apparently abysmal value to its customers, Comcast gets dinged for poor customer support and in-home service. Time Warner, in addition to being a bad value, misses the mark on customer support and reliability.

Bigger isn't always better
As I said, two of the three worst companies in cable TV in America today are currently attempting to merge into one (presumably really big, really bad) provider. But that might not necessarily be a good thing for consumers. Turns out, according to Consumer Reports' findings, the best outfit in cable in America is a small, family owned and operated cable provider based in Butler, Pa. -- that wasn't even on the list of best cable companies in 2013. 

Armstrong Cable Services, a division of the privately held Armstrong Group of Companies,replaces 2013 winner Verizon (VZ 1.28%) FiOS at the top of CR's survey this year. According to CR readers, Armstrong's cable TV service is the only consistently reliable cable provider in the nation. Its picture quality equals the best offered by anyone in the U.S., Verizon and DirecTV (DTV.DL) excepted. And Armstrong is one of only two cable companies said to offer customers an acceptable value for the service it provides.

The downside? Armstrong's website confirms that the company offers customers Internet and phone service in addition to cable. (And according to S&P Capital IQ, Armstrong's parent company also owns "a chain of restaurants in Pennsylvania and Ohio" -- so literally, with Armstrong you can get dinner and a show). But CR has no data on the reliability, quality, or value of Armstrong's phone or Internet service. (Or of its restaurants, either). At least not yet.

But bigger may be better for investors
Final point here, and for this one we'll need to doff our consumer caps and put on our investor hats instead. While the fact that Armstrong is a private company means you can't invest in "the best company in cable today," you can at least own a piece of one of the worst -- but most profitable. 

You see, customers may not like subscribing to publicly traded Comcast very much. But with the company likely to end up controlling the pipes to 30 million cable TV-watching homes after its merger with Time Warner, these customers may not have much choice in the matter. And with Comcast stock selling for less than 17 times earnings, while expected to post long-term earnings growth of 17% annually -- and paying out a 1.6% dividend kicker -- Comcast shares may be too cheap to avoid as well.  

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