Boston consulting firm The Yankee Group published a report this week on the growth in use of personal digital video recorders (known variously as PVRs, DVRs, or "Tivos" (NASDAQ:TIVO)). The upshot of the report should come as no surprise to Fools in general and Motley Fool Stock Advisor subscribers in particular. These "time-shifting" VCRs-on-a-hard-drive are becoming ever more popular. By 2009, they may inhabit nearly one-third of all U.S. households.

A CNN/Money write-up of The Yankee Group's report helpfully contained a list of several leading DVR makers. Category-leading Stock Advisor pick Tivo and satellite TV company Echostar (NASDAQ:DISH) got top billing; also mentioned were competing gadget makers Scientific-Atlanta (NYSE:SFA), Motorola (NYSE:MOT), and NDS (NASDAQ:NNDS).

Given that I got this list of DVR "players" free of charge, I think it's only polite to add even more value for our readers and go one step further. Now that we know who the players are, let's take a look at their valuations. Perhaps it's still possible to get in on the ground floor of this market, which is expected to expand nearly five-fold in the next four years.

Company Enterprise Value
($ in millions)		 Free Cash Flow
(S in millions)
 EV/FCF P/E Growth Rate
(next 5 years, %)
Tivo 420 (11.5) -- -- 35
Echostar 18,150 127 143 187 30
Motorola 36,420 3,090 12 31 10
Scientific-Atlanta 2,900 293 10 20 9.8
NDS 1,190 155 8 42 10


Data compiled from Yahoo! Finance and MSN Money.

Because Tivo has neither free cash flow nor earnings, it remains the most speculative play (although it's got the potential to break rules and take names). The next two most expensive stocks -- Echostar and Motorola -- are not really pure play DVR makers. Echostar is more of a communications company and Motorola is a conglomerate of many different hi-tech businesses. (What's more, as Ben McClure recently described, Motorola is losing market share to rival Scientific-Atlanta.)

Jump to the bottom of the list, and there's little UK-based NDS. It's the cheapest of the bunch on a free-cash-flow basis, but it has the least name recognition. So when all is said and done, as an investor, I'm going to be looking hardest at Scientific-Atlanta. It already provides DVRs to at least two of the big cable networks, Cox (NYSE:COX) and Comcast (NASDAQ:CMCSA). Its EV/FCF ratio is attractively low. And since I have one of its machines sitting in my living room, it's the company I know the best of the bunch.

Are you more of a "rule breaker" than a deep value hunter? Read up on Tivo as well:

And while you're at it, sign up for a free trial subscription to Motley Fool Rule Breakers and get a little background on how companies like Tivo can upset traditional valuation models in a Wall Street minute.

Fool contributor Rich Smith has no interest in any of the companies mentioned in this article.