Street awaits Comcast dividend
EmptyComcast is scheduled to report its fourth-quarter financials today, but many on Wall Street are more interested in hearing if the largest U.S. cable operator will reintroduce a dividend after nearly a decade.
Comcast's business has been challenged since late 2007, which has driven down the company's shares near their 52-week low. The cable firm, led by chairman and CEO Brian Roberts, might have to bring back dividends to attract and retain investors.
"Investors have lost confidence in the ability of management to allocate capital properly," said Gamco Investors portfolio manager Larry Haverty, whose company is a Comcast shareholder. "Management needs to allocate capital to a permanent or one-time dividend. This has been done successfully by Cablevision and Rogers Communications in Canada. The no-dividend policy needs to go."
Others on the Street agree. Miller Tabak + Co. analyst David Joyce said the fourth-quarter earnings report provides "the potential for an initial dividend announcement that investors have been clamoring for." He argued that starting a dividend is even "perhaps a necessity to get shareholders back into the stock" after a recent reduction in growth guidance.
"While competition and the economic slowdown continue to chip away at Comcast's business, we would become more constructive on the stock if the company were to post strong 2008 free-cash-flow guidance and show a renewed commitment to shareholder friendly initiatives, such as a dividend," Goldman Sachs analyst Ingrid Chung wrote.
Comcast officials declined comment on the likelihood of a dividend ahead of the earnings report and conference call.