The twenty-first century has given rise to an information-driven world, and investors have noticed this. Some tech companies such as Facebook and Google are making inroads into the media industry. However, the performance of the sector in 2016 and early 2017 suggest investors could be in for a kill. The emergence of strong media companies such as Netflix has spurred attention to media stocks.
As millennials demand more entertainment, investment in media stocks makes sense at this time. This article analyses some of the most promising media companies whose stock would not disappoint in 2017.
Media Stocks You Need to Know
There is heated media activity in the US and Europe as speculation about the $85.4 billion AT&T and Time Warner merger. Similar mega deals in the media industry loom. This can only mean good investment opportunities in media stocks. However, the deals are subject to lengthy authorization procedures. And we can tell a good deal by assessing some fundamentals.
Analysts contend that media content is driving value in the industry. It is widely accepted that the mergers and acquisitions in the industry will have positive consequences for media investors.
1. CBS Corporation
CBS is perhaps the most exciting stock to watch in the media industry. It creates and sells content in a wide variety of channels including cable TV and internet. It also has diversified into entertainment and publishing. Moreover, CBS is now a global multinational.
Listed on the NYSE, the CBS stock price per share as of May 26, 2017 stood at a modest $61.57. Looking at its historical performance, its 52-week high is $70 and $48.88 on the lower side. Therefore, over a period of one year, investors have raked in north of 25% gains.
The CBS stock is dubbed a “buy” by most analysts. Especially considering that the company announced quarterly dividends of $0.18 per share. In a vote of confidence, CBS shareholders granted the chairperson, president, and CEO Leslie Moonves an additional 5 years at the helms of the company.
2. Cinemark Holdings (CNK)
Traded at NYSE as CNK, Cinemark Holdings is among media stocks with huge potential for 2017. The company owns theaters across the US. Moreover, it has ventured into Taiwan as part of its journey to become a global player.
CNK closed at $40.49 on May 26, 2017 and has a 52-week range of $32.60-44.84. This shows that the stock is on an upward trajectory. Additionally, its dividend yield stands at 2.86%. Should you invest in the stock, you stand to get a dividend payout of $0.29 per share just before the start of its new financial year.
Cinemark Holdings has a lot going on including a partnership with THX to certify XD auditoriums, a new revenue stream. Additionally, the company is enhancing its theater seats into luxury lounge recliners. They want to provide moviegoers with unparalleled entertainment experience.
3. AMC Entertainment
Both AMC Entertainment and Cinemark Holdings will continue to rake in money as long as Hollywood maintains its streak of movie blockbusters in 2017 as it did in 2016. So far, that seems to be the case because the domestic box office is poised to grow by close to 6%. AMC Entertainment Holdings is also in the movie theater business and targets over 20 million ticket buyers in 2017.
The AMC share price stood at a modest $24.7 by close of business on May 26, 2017 against a 52-week range of $23.23-35.65. This means the growth potential for this stock is immense. It has a dividend yield of 3.24% and a market cap of $3.22 billion. Therefore, it is easy to understand why it received the label “growth stock for smart investors.”
4. Time Warner Inc. (TMX)
This is arguably the most notable mass media and entertainment multinational ranked third in the world with respect to gross revenues. The company trades at NYSE with the symbol TMX and is currently priced at $99.07 as at May 26, 2017. An analysis of its performance over 52-weeks indicates a stock on the move up, climbing steadily from $75.66 as at May 31, 2016.
TMX is still growing strong despite a false start of its merger deal with AT&T. In its first quarter results of 2017, it reported a 6% increase in revenue and a 4% rise in operating profits. Earnings per share, on the other hand, grew a whopping 23% and 11% when adjusted. Its subsidiaries such as CNN are aiming to be market leaders in the provision of digital news and entertainment.
Netflix has mounted a spirited campaign in its video streaming services and globalization efforts. So far, it closest competitor in the streaming business is Amazon, but with a presence in over 130 countries, Netflix is undoubtedly building a strong international brand. This global expansion comes with value multiplication for NFLX investors.
Netflix trades at NASDAQ and closed at $162.43 on 26 May 2017. Examining its 52-week range, we realize it has almost doubled from $84.5-164.10, earning investors almost 100% gains. Its market price to book ratio stands at 26.07, but still, the stock seems to eye more growth.
Netflix continues to explore more products to expand its business and presence in the world. Its biggest strength is the growing ubiquity of the internet and mobile network coverage across the globe. This makes it one of the most viable media stocks for 2017.
6. Twenty First Century Fox Inc. (FOX-A)
A mass media giant, this company trades at NASDAQ with a market cap $50.80 billion in May 26 2017 and a price of $ 27.03 at the same time. The company beat forecasts to announce a 5% year-on-year growth and adjusted quarterly earnings per share of 15%. The company’s cable television segment continues to earn huge advertising revenues.
At a market capitalization of about $50 billion, the company’s stock is trading at a price-to-earnings (P/E) ratio of 16.62. The company is still expanding, announcing a $14.6 billion bid for European internet and pay-TV company Sky to list among top media stocks for 2017.
7. Walt Disney Co. (DIS)
Trading at the NYSE, Disney is priced at a premium $108.41 in May 26, 2017. Its market cap stood at $168.96 billion, making it one of the largest media and entertainment companies by market capitalization in the world. The hedge fund Viking Global Investors bought $250 million worth of Disney stock in January 2017, attesting to the growing interest of the stock in 2017.
DIS P/E ratio stands at an impressive 18.9 with a 52-week range of $90.31-116.10. It continues to spin money-earning blockbusters and theme parks that grow its revenues on an annual basis. Moreover, Disney has pursued an aggressive globalization campaign with considerable success.
The media stocks to watch in 2017 range from mass media to internet streaming companies. It is important to note that content creation and dissipation over the internet seems to have an edge in this digital age. Movie theater companies such as AMC Entertainment and Cinemark Holdings are buoyed by the growth in the film industry and media companies involved. Kindly let us know your experiences, thoughts and feel free to ask any questions on key media stocks for 2017.