It's been more fun to watch television than invest in the industry, but EchoStar Communications Corp., owner of the Dish Network satellite service, could be an entertaining addition to your portfolio.
The stock (symbol DISH) looks like a good deal. At $28, it trades at 15 times analysts' earnings estimate of $1.90 a share for the next four quarters. That's reasonable for a company in a high-growth industry that's expected to post 25% annual earnings growth for the next three to five years.
Prudential Equity Group analyst Katherine Styponias says the stock is worth $35. She predicts that EchoStar's customer base and earnings -- and, therefore, its stock price -- will get a charge because the company is ready to launch a high-definition version of Dish sometime in 2006. This will give EchoStar a better shot at the free-spending, higher-income viewers who have preferred Dish's arch-rival, DirecTV, or a cable network such as Comcast or Time Warner. DirecTV already has an HD product, but EchoStar is known to price its TV packages aggressively and gain market share. Moreover, Styponias says, DirecTV has hurt itself by imposing strict credit requirements on would-be customers, literally sending tens of thousands of people to EchoStar at a time when most consumers have money to spend.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Finally, although it's impossible to know if there's anything to this, EchoStar could be a takeover target. Founder, chairman and chief executive Charles Ergen and his wife (also a company officer) own 53% of the common stock and control almost all of the voting stock. He denied two weeks ago that ATT wants to buy EchoStar. But satellite TV looks like a good fit for many telecom giants.
--Jeffrey R. Kosnett
-
AI vs the Stock Market: How Did Alphabet, Nike and Industrial Stocks Perform in June?AI is a new tool to help investors analyze data, but can it beat the stock market? Here's how a chatbot's stock picks fared in June.
-
Stock Market Today: A Historic Quarter Closes on High Notes"All's well that ends well" is one way to describe the second quarter of 2025, at least from a pure price-action perspective.
-
My Three-Day Rule for Investing: And If it Applies NowStock Market I've seen a lot in my career. Here's what I see now in the stock market.
-
Is It Time to Invest in Europe?Stock Market Europe is being shaken out of its lethargy, militarily and otherwise, by Donald Trump's changes in U.S. policy. Should investors start buying?
-
Fed Leaves Rates Unchanged: What the Experts Are SayingFederal Reserve As widely expected, the Federal Open Market Committee took a 'wait-and-see' approach toward borrowing costs.
-
Fed Sees Fewer Rate Cuts in 2025: What the Experts Are Saying
Federal Reserve The Federal Reserve cut interest rates as expected, but the future path of borrowing costs became more opaque.
-
Why Is Warren Buffett Selling So Much Stock?Berkshire Hathaway is dumping equities, hoarding cash and making market participants nervous.
-
Fed Cuts Rates Again: What the Experts Are Saying
Federal Reserve The central bank continued to ease, but a new administration in Washington clouds the outlook for future policy moves.
-
If You'd Put $1,000 Into Google Stock 20 Years Ago, Here's What You'd Have TodayGoogle parent Alphabet has been a market-beating machine for ages.
-
Fed Goes Big With First Rate Cut: What the Experts Are Saying
Federal Reserve A slowing labor market prompted the Fed to start with a jumbo-sized reduction to borrowing costs.
