Dividend Comparison – Media

Media companies have an immense power to reach large populations and influencing them. There are many different kinds of way people consume and entertain themselves – from radio to television to movies, music, vacation resorts etc. The surprising part of this whole mass media empire is that it is only a handful (6-8) of companies who control over 90% of the market share. These companies are truly conglomerates in their own sense.Earlier this year, Comcast bought full stake of NBC Universal from GE earlier this year for $16.7B and I have been thinking of looking into the various entertainment and media companies as a potential investment. Following are the media giants and their dividend comparison.

The Media Giants

Company Name
Ticker
Market
Cap
Quote
P/E
Yield
Payout
Ratio
5-yr
DGR
Comcast/NBC CMCSA $117B $44.68 18.83 1.75% 27% 41.74%
21st Century Fox
News Corp
FOX
NWSA
$70B
$8.6B
$30.92
$14.93
11.92
5.18
0.56%
1.14%
7%
NA
9.1%
NA
Walt Disney DIS $120B $66.98 20.35 1.12% 23% 16.4%
Viacom
CBS Corp
VIA
CBS
$35B
$32B
$72.41
$52.89
17.58
19.86
1.66%
0.91%
27%
18%
NA
-13.99%
Time Warner TWX $57.5B $61.70 19.02 1.86% 33% 7.86%
Sony SNE $22.4B $22.19 95.26 1.25% 64% 3.66%

Subsidiaries

A table of subsidiaries below shows the extent of each company’s empire. Each company has a major stake in various fields of the industry.
Comcast/
NBC
Fox/
News Corp
Walt Disney
Viacom/
CBS
Time Warner
Sony
Broadcast TV NBC Fox ABC CBS,
The CW (50%)
The CW
(50%)
Cable
USA Network,
SyFy, Bravo, E!
FX, National
Geographic
ABC Family,
A&E (50%),
Disney Chnl
MTV,
Nickelodeon,
Comedy Central,
Showtime
TNT, TBS,
HBO
Movie Universal Studios 20th Century
Fox
Walt Disney
Pictures
Paramount Pictures,
CBS Films
Warner Bros Columbia Pictures
Theme park/
Resorts
Universal Parks
& Resorts
Walt Disney
Parks & Resorts
Nickelodeon
Resort Orlando
Parque Warner
Madrid (5%)
Publishing Wall St Journal,
The Times
Marvel, Disney
Publishing
Simon & Shuster DC Comics,
Time, People,
Sports Illus
News MSNBC Fox News ABC News Now CNN, HLN
Business CNBC Fox Business
Sports NBC Sports Fox Sports ESPN CBS Sports NBA TV
Recod label Fox Music Disney Music CBS Records Warner Music Sony Music
Internet iVillage, Fandango,
Hulu (32%)
News Corp. Digital
Media, Hulu (36%)
Disney Interactive,
Hulu (32%)
MTV News Media,
CBS Interactive
Flixter (32%) Sony Online
Entertainment

Disney and Comcast (esp after NBC Universal acquisition) are the largest conglomerates of the mass media industry with market caps of $120B and $117B respectively. The two companies also look very well diversified across the businesses. They have attractive 5-yr dividend growth rates, but the yields are quite low (<2%). The yields are not attractive enough for me to initiate a position, but I will continue to keep an eye on these two.

Disclosure: None.

Disclaimer: The information provided here is for educational purposes only. All opinions here are my personal opinions and should not be taken as financial advice. I am not qualified to be a financial advisor. Always consult with your financial advisor before investing in any of the companies mentioned on this blog.

Dividend Comparison – Telecom

Telecom companies have become an essential utility over the past few years. Just like essential services such as water and electricity, communication has become the next most important utility for every person. A lot of investors get bogged down with the gadget markers since there is a new shiny toy to talk about every few weeks or months. The arguments between which device is the coolest goes back and forth between Google, Apple and Samsung. The actual winners that provide us with the link to the Internet, the telecom giants, are the real winners no matter which gadget an end-user loves and adores. These telecom providers can be great investments for everyone and in this article, we will compare the dividends of the companies. These companies are cash cows and most of them are mature companies paying out hefty dividends.

US Market

I have filtered telecom service providers in the US which payout dividends on a regular basis (this leaves out some players such as T-Mobil, Sprint etc) and larger than $2B market cap.

Company Name Ticker Quote P/E Yield Payout Ratio 5-yr DGR
CenturyLink Inc CTL $36.27 25.78 5.96% 156.9% 23.03%
Frontier Comm Corp FTR $4.10 26.19 9.76% 250% -16.74%
AT&T Inc T $35.88 28.01 5.02% 138% 2.85%
Verizon Comm Inc VZ $50.28 126.51 4.1% 511.3% 3.67%
Windstream Corp WIN $8.07 30.10 12.39% 270.3% 0%

Canadian Market

With the news of Verizon (VZ) potentially entering the Canadian market, most of the wireless providers had their stock values drop last month. Some of these may have been oversold and potentially at an attractive price to pick up.

Company Name Ticker Quote P/E Yield Payout Ratio 5-yr DGR
BCE Inc BCE $43.82 13.63 5.32% 72% 16%
Rogers Comm Inc RCI.B $42.06 12.49 4.14% 51% 17.22%
Telus Corp T $31.82 15.67 4.27% 67% 8.3%
Shaw Comm Inc SRJ.B $25.50 15.21 4.00% 64% 7.45%

My Thoughts

The US telecom giants have a comical payout ratios and very high P/E ratios. The dividend payouts are simply not sustainable and almost beg for the stock to be shorted. I have decided to stay away from these stocks.

The Canadian providers seem more stable and have a decent payout. The selloff has definitely made them attractive, but if Verizon does enter the market, it means a drop in the market share for each of these. Shaw Communications has been the most resilient of the lot since it is not just a wireless provider and has its business diversified into cable, satellite and programming content. I will be keeping a close eye on the Canadian providers over the next few days and potentially make a move to pick some up.

Disclosure: None

Disclaimer: The information provided here is for educational purposes only. All opinions here are my personal opinions and should not be taken as financial advice. I am not qualified to be a financial advisor. Always consult with your financial advisor before investing in any of the companies mentioned on this blog.

Getting Started – Asset Allocation

Diversification of assets is one of the major pillars of investing. If and when disaster strikes, you should be in a position to protect your assets. Diversification of assets has been proven to protect people’s portfolios time and again and something that should not be ignored.What do you diversify with?

  • Cash – Emergency funds, savings, GICs etc
  • Equity – an asset allocation of 25%-75% is recommended
    • Canadian equity
    • US equity
    • International (rest of the world) equity
  • Bonds – an asset allocation of 25%-75% is recommended
    • High grade bonds
    • Inflation protected bonds such as TIPS or real return bonds
    • Corporate bonds
  • Commodities – such as gold, oil etc can be a good way to hedge to protect against inflation
  • Real Estate – can be either your own home or via a REIT. Also acts as a great hedge to protect against inflation.

My Asset Allocation

I realize that my current portfolio goes against the recommended value of holding atleast 25% bonds. This is because of the extraordinary times that we are going through, with the bond yields being extremely low. In addition to that, once the interest rates start rising again, the bond funds lose value – so I am expecting some negative returns there. Nevertheless, I hold approximately 11% of my portfolio in bonds. I have increased my holdings in the next best thing to bonds with income producing equity sectors such as utilities and consumer staples.

Another way to looking at the diversification is to look at the geographical diversification – so that I am protected against disasters in one country. For e.g., if I was completely invested in the US market back in 2007-2008, I would have lost a lot more money than I did. With part of my portfolio in Canadian equity and international equity, I was able to protect my assets. My current geographical diversification looks as shown above.

What does your diversification look like? Are you diversified enough?

Disclaimer: The information provided here is for educational purposes only. All opinions here are my personal opinions and should not be taken as financial advice. I am not qualified to be a financial advisor. Always consult with your financial advisor before investing in any of the companies mentioned on this blog.

Getting Started – Where do I go from here

If you have gotten started with some investing and are comfortable with it, you are already on your way to financial freedom 🙂 In the first post of this Getting Started series What to invest in, I covered some basics on the advantages of index funds for people starting out. ETFs are comparatively better than mutual funds, but over the course of years, the fees do add up (click here for my post on fee comparison) and more often than not, you are better off picking quality companies to invest in.

Dividend Growers

There are multiple schools of thoughts on picking the companies to invest in – but my choice is to invest in dividend growing companies. These are generally companies that are mature and stable; have been paying dividends constantly over the years and growing their dividends on year-to-year basis. These companies almost always perform better than the index funds (when you pick the right combination and balance your portfolio with appropriate asset allocation) both in the bull and bear market.

It is important to keep in mind that you want to own these stocks and not rent them – i.e., invest for the long term and stay the course.

Choices

You can get ideas for stock picking by looking up lists such as the following:

Want more ideas for picking dividend stocks? Check out which stocks own by the big name ETFs such as
Disclaimer: The information provided here is for educational purposes only. All opinions here are my personal opinions and should not be taken as financial advice. I am not qualified to be a financial advisor. Always consult with your financial advisor before investing in any of the companies mentioned on this blog.

Chatter Around the World – 3

Welcome to the Chatter Around the World weekly link update. Its been a busy week. This week marked the kickoff of the second quarter earnings season and the tone has been fairly positive. In addition to that, Ben Bernanke indicated that the tapering may not occur just yet giving the markets a boost. Lets dive into the articles that caught my attention this week.

General Reads

The Newsmakers

Dividend Reads

Updates from My Portfolio Holdings

New blog posts this week

This has been a very productive week for my blog. I managed to crank out 4 articles!
Have a wonderful weekend.