Markets

EchoStar: HDTV Plus Satellite Equals Profits

New high-definition video points to accelerating growth at this independent satellite TV company.

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.

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

Most Popular

11 Good Reasons to Cancel Amazon Prime
Budgeting

11 Good Reasons to Cancel Amazon Prime

You probably aren't using most of the perks tucked into that $119 annual fee -- which you don't need to pay to get the free Amazon shipping you crave.
April 13, 2021
Who Should Return Their Third Stimulus Check to the IRS?
Coronavirus and Your Money

Who Should Return Their Third Stimulus Check to the IRS?

Some people who receive a third stimulus check are required to send it back to the IRS. Others can return it voluntarily.
April 12, 2021
2021 Child Tax Credit Calculator
Tax Breaks

2021 Child Tax Credit Calculator

See how much money you'll get in advance under the new child tax credit rules for 2021.
April 14, 2021

Recommended

Gen I: What Investing's New Class Looks Like
investing

Gen I: What Investing's New Class Looks Like

COVID-19 has been a disruptive force in the global economy. But it also has created opportunity for a new group of investors dubbed "Gen I."
April 9, 2021
Psst: If You’re Looking for an Unloved Investment Sector, How About Uranium?
investing

Psst: If You’re Looking for an Unloved Investment Sector, How About Uranium?

Uranium has become the forgotten fuel, but that could change … and if it does, there could be some interesting opportunities.
April 7, 2021
SRI and ESG are Not Interchangeable. Here’s Why We Choose SRI.
investing

SRI and ESG are Not Interchangeable. Here’s Why We Choose SRI.

SRI investing leaves room for judgment calls that better align with investors’ values. Meanwhile, ESG investing is more vulnerable to companies gaming…
April 7, 2021
Bitcoin: Should You Invest? With Tyrone Ross
Becoming an Investor

Bitcoin: Should You Invest? With Tyrone Ross

Pretending it’s a fad that will go away didn't work for the internet, and it won’t work for cryptocurrency, either. But there are still so many questi…
April 6, 2021