Advertisement
Markets

Cable Companies: Look Past the Cable Label

Cable providers such as Comcast haven't been sitting around while telecom and satellite firms try to encroach on their business.

You've likely seen the commercials: Telecom companies pressing their case to enter the cable business. That competition will mean cheaper channels for all of us, and a big black eye to those monopoly-market cable companies that have been gouging us for years, the argument goes.

Cheaper cable, probably, but don't bet on the second half of that conjecture. In fact, bet against it. Cable companies haven't been lollygagging while the telecom industry makes its case and while satellite providers try to chip away at cable's dominance.

Advertisement - Article continues below

Cable is strong in several areas. In fact, the label "cable" is giving way to the acronym MSO, for "multiple service operators." In addition to hundreds of TV channels, cable MSOs provide high speed Internet connections (usually faster and more reliable than DSL service), and many are selling digital service that allows viewers to pick programs to watch at their leisure. With video on demand, you can download thousands of movies whenever you want. Plus cable MSOs are getting into phone service via the Internet, which may prove to hurt telecom companies more than telecom's forays into cable service will hurt cable companies.

Some cable companies are pushing this triple threat in ads, promising a discount on services if you consolidate with a single provider, and flaunting the convenience of a single monthly bill.

Advertisement
Advertisement - Article continues below

But with telecom looking like the barbarians at cable's gate, cable company stocks have been depressed. Shares of Comcast closed Thursday at $32.57, just $1 or so below its 52-week high. But that is far below the record high of $53 set in December 1999.

Comcast, the nation's largest cable operator, has been a strong performer, adding customers for cable, video-on-demand and Internet phone services. Analyst Spencer Wang of Bear Stearns resumed coverage of Comcast (symbol CMCSA) on Thursday with an "outperform" rating. He said Comcast is better than telecom companies at bundling products and offering faster services. Wang's target price for 2006 is $37.

Advertisement

Most Popular

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)
tax deadline

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)

Between due dates for IRA or HSA contributions, paying estimated taxes and other deadlines, there's more to do by July 15 than just filing your federa…
July 10, 2020
65 Best Dividend Stocks You Can Count On
stocks

65 Best Dividend Stocks You Can Count On

These 65 Dividend Aristocrats are an elite group of dividend stocks that have reliably increased their annual payouts every year for at least a quarte…
July 8, 2020
Know Why Your Credit Score Changes: 9 Money Moves to Consider
credit & debt

Know Why Your Credit Score Changes: 9 Money Moves to Consider

Your credit score is a key indicator of your financial well-being and of the risk you pose to lenders. How good is yours?
July 10, 2020

Recommended

Closing Bell 7/10/20: Gilead Gives Stocks a Booster Shot
Markets

Closing Bell 7/10/20: Gilead Gives Stocks a Booster Shot

Stocks rallied out of negative territory Friday after Gilead announced that remdesivir helped reduce COVID-19 mortality risk in a clinical trial.
July 10, 2020
2020 Stock Market Holidays and Bond Market Holidays
Markets

2020 Stock Market Holidays and Bond Market Holidays

Is the market open today? Take a look at which holidays the stock markets and bond markets take off in 2020.
July 10, 2020
Closing Bell 7/9/20: Another Split Market as Jobs Concerns Grow
Markets

Closing Bell 7/9/20: Another Split Market as Jobs Concerns Grow

A mounting list of planned playoffs weighs on stocks Thursday, though Big Tech manages to hoist the Nasdaq up to another record high.
July 9, 2020
Closing Bell 7/8/20: Tech Stocks Lead Wall Street Forward Again
Markets

Closing Bell 7/8/20: Tech Stocks Lead Wall Street Forward Again

U.S coronavirus cases continue to spike, but Apple helped lead another Big Tech rally to drive the major indices higher Wednesday.
July 8, 2020