The Dividend Daily

A few months back, Wall Street was popping champagne on Comcast's (CMCSA) announcement that they would begin paying a dividend. We were excited, as well -- until we saw the minuscule size of the payout, a paltry 25 cents per share annually. Such a small dividend is simply not enough to encourage investors to buy Comcast stock. If someone wants to own a hybrid media/utility company, they better get paid enough to do so. Look at AT&T (T) or Verizon (VZ) as the prime example of adequate yields in this sector. At present, the cable industry is in the midst of battle with satellite companies and telecom players to sell you a "triple play" of TV, Internet and VOIP digital phone service (this type of phone system differs from traditional landline phones in that it uses your existing Internet connection to place phone calls). The competition in this space is heating up -- in its latest earnings report, Comast reported losing 57,000 basic video subscribers, while in the same period last year it added 83,000. The trend is clearly going the wrong way there, as Comcast appears to be losing market share to its new competitors. Comcast may be better off by focusing on stealing customers away from the telcos, where they added nearly half a million new subscribers for their high-speed internet service, and 639,000 customers for digital telephone. Until we see better execution and a higher dividend payout, investors are best keeping their finger on the remote control and not on their computer keyboard purchasing the stock. Comcast (CMCSA) currently holds a Dividend.com rating of 3.0 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system here.

Dividend.com archives (articles more than 30 days old) are only available to Dividend.com Premium subscribers.

Sign up for a Dividend.com Premium account for instant access to article archives, stock ratings on over 2,000 dividend-paying stocks, and much more! FREE TRIAL available!