Hardly anyone in our family actually sits down to watch the flat-screen television in the living room. Typically the viewing fare is streaming video, on smartphones, while multi-tasking. My toddler grandsons mostly watch short YouTube cartoons on my laptop.

It’s a far cry from the bygone era of “appointment viewing,” when millions of Americans would rush to their TV sets to watch, say, The Ed Sullivan Show at 8:00 p.m. sharp every Sunday night.

Today’s media serve up a vast cornucopia of anything you want, when you want it, on demand, on any mobile device, twenty-four seven. Investors who pick the right media stocks stand to reap a fortune, but the bewildering pace of technological change makes it difficult to sort the winners from the losers.

Hence the brutal competition in the media/telecommunications space.

A particularly aggressive media competitor is Comcast (NSDQ: CMCSA), one of the largest cable companies on the planet. Comcast has made several bold moves to diversify its operations, but many analysts continue to look askance at Comcast because of its legacy cable business. The Silicon Valley “story stocks” hog all the glory. The conventional wisdom is that video streaming will kill cable companies.

The bulls argue that Comcast’s strategic repositioning makes it an undervalued media/telecom gem right now. The bears argue that technology disruptors are poised to eat Comcast’s lunch.

Who’s right? Let’s find out.

What Is Comcast?

Comcast (market cap: $177.3 billion) is a vertically integrated, multi-media colossus, with 26.2 million Internet customers and 22.3 million video customers.

By revenue, Comcast is the second-largest broadcasting and cable television company in the world. It’s also the largest pay-TV company, the largest cable TV company and largest home Internet service provider in the U.S., and the nation’s third-largest home telephone service provider.

Based in Philadelphia, Comcast operates via five divisions: Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment, and Theme Parks.

Comcast provides services in the U.S. for residential and commercial customers in 40 states and in the District of Columbia. Comcast owns NBCUniversal, making it a major producer of feature films and television programs.

Comcast owns and operates the movie studio Universal Pictures and Universal Parks & Resorts; Xfinity cable communications; over-the-air national broadcast network channels NBC and Telemundo; and cable-only channels including MSNBC, CNBC, USA Network, NBCSN, and E!

Comcast last year engaged in a long bidding war with rival Twenty-First Century Fox (NSDQ: FOXA), which owned 39% of media giant Sky, for the remainder of Sky.

Comcast in September 2018 won the auction against Fox in a deal that valued Sky at $40 billion.

As of 2018, Comcast ranked number 33 on the Fortune 500 list of the largest U.S. corporations by total revenue.

For its full year 2018, Comcast posted revenue of $94.5 billion, representing year-over-year growth of 11.1%. Earnings in 2018 grew 26% compared to 2017.

How Has Comcast Stock Performed?

• Over the past 12 months, CMCSA has gained 16.8% and the S&P 500 has gained 5.2%.
• Over the past two years, CMCSA has gained 4.2% and the S&P 500 has gained 18.4%.
• Over the past five years, CMCSA has gained 56.1%, the S&P 500 has gained 50%, and the benchmark SPDR S&P Telecom ETF (XTL) has gained 24.5%.

How Has Comcast Performed In 2017/2018?

• In 2017, CMCSA gained 16% and the S&P 500 gained 19.4%.
• In 2018, CMCSA lost 15% and the S&P 500 lost 7.5%.

Who Are Comcast’s Rivals?

AT&T (NYSE: T)

With a market cap of $224.2 billion and based in Dallas, AT&T operates through four segments: Business Solutions, Entertainment Group, Consumer Mobility, and International.

The Business Solutions segment offers wireless, legacy voice, wireless equipment, and other services. The Entertainment Group provides video entertainment and audio programming to 25 million subscribers, as well as broadband and Internet services to 13.5 million residential subscribers. Consumer Mobility offers postpaid and prepaid wireless voice and data communications.

Read This Story: Our AT&T Stock Prediction In 2019 (Buy or Sell?)

Verizon (NYSE: VZ)

Verizon (market cap: $248.2 billion) provides telecommunications and entertainment products and services worldwide. The company’s offerings include wireless voice and data services and various Internet of Things products and services, as well as Internet, TV, and voice services under the Fios brand name.

The company’s wireline segment offers traditional circuit-based network products and services. Based in New York City, this telecom giant boasts 116.3 million retail connections. The company was formerly known as Bell Atlantic.

Read This Story: 7 Point Verizon Dividend 2019 Guide (*Expert Analysis*)

T-Mobile US (NSDQ: TMUS)

T-Mobile is the brand name used by the mobile communications subsidiaries of the German telecommunications company Deutsche Telekom AG (OTC: DTEGY).

T-Mobile US (market cap: $61.4 billion) provides mobile communications services to 79.7 million customers in the U.S. Puerto Rico, and the U.S. Virgin Islands. Based in Bellevue, Washington, the company also provides wireless devices, including smartphones, tablets, and other mobile devices, as well as accessories.

Will Comcast Stock Go Up In 2019 (Should You Buy)?

Historically, telecommunications stocks were viewed by investors as low-beta blue chips. They lacked volatility and drama and conferred steady growth and income, making them staples of retirement portfolios.

But mega-merger activity is shaking up the telecommunications and media landscape, with only a handful of giants now controlling most of what we see and hear. That consolidation won’t abate anytime soon, as media giants seek economies of scale and try to stay ahead of fast-moving digital innovations.

That’s why I think Comcast’s purchase of Sky was a smart move to ensure future growth. This video offers further insights into the deal.

Cable companies are transitioning from content distributors to content creators; Comcast is in the vanguard of this trend.

Comcast’s acquisition of NBCUniversal from General Electric (NYSE: GE), completed in 2013 for $16.7 billion, was a huge strategic gamble that so far has paid off. The total acquired assets were valued at about $40 billion, which means Comcast scored a deep bargain.

The massive deal transformed the cable company from a mere distributor into a vertically integrated content creator, giving it control of one of Hollywood’s Big Six film studios, 10 local TV stations, a dozen national cable networks, and several theme parks.

Comcast further expanded its already-hefty content portfolio by making a $3.8 billion all-cash acquisition in 2016 of DreamWorks Animation SKG.

The cable giant’s expanding content portfolio should give you the confidence to buy the stock, or continue holding it, despite the long-term trend toward “cord-cutting,” whereby subscribers increasingly cancel their cable service.

Comcast’s telecom competitors got battered by price wars. AT&T also is hobbled by onerous debt from ill-advised acquisitions. However, Comcast has the balance-sheet firepower to continue being a consolidator, or to invest in building new streaming video networks.

According to the latest Digital Market Outlook from research firm Statista, the streaming video on demand (SVoD) market is far from saturated (see chart).

Comcast’s dividend yield of 2.10% should appeal to income investors. During the past 12 months, Comcast’s average dividends per share growth rate was 20.6% per year. During the past three years, the average growth rate was 15% per year. During the past 10 years, the average growth rate was 19.9% per year. Those impressive dividend growth rates are likely to continue.

What’s more, CMCSA stock is reasonably priced, largely because of Wall Street’s myopia about legacy cable companies.

Comcast’s 12-month forward price-to-earnings ratio (FPE) is 12.5, higher than struggling AT&T (8.4), but in line with Verizon (12.5) and lower than T-Mobile (15.4) and the S&P 500 (17.5). Among its competitors, Comcast is the nimblest at shifting into the content side of media, conveys the greatest growth potential, and presents the best value.

Will Comcast Go Down In 2019 (Should You Sell)?

Let’s give the bear case against Comcast a fair hearing.

Technology companies are breathing down Comcast’s neck. Netflix (NSDQ: NFLX) and Amazon (NSDQ: AMZN) are plowing huge sums into creating original, quality content. Comcast is continually playing catch-up via expensive acquisitions.

Another worrisome sign is that Comcast’s Cable Communications segment still accounts for the bulk of annual revenue and operating income (61% and 70%, respectively, in 2018).

Over the past two years, Comcast’s video and voice subscribers have been falling in number, in the face of competition from live streaming media and other alternatives.

The pace of cord cutting, the phenomenon of viewers canceling their cable subscriptions and switching to online options, continues to accelerate. The company keeps adding broadband subscribers while losing video subscribers.

Meanwhile, the consensus sentiment on Wall Street is that Comcast overpaid for Sky, a premium purchase price that could adversely affect the company’s financial metrics.

Overall Comcast Forecast And Prediction For 2019

I’m siding with the bulls.

While cord cutting will continue to weigh on a portion of Comcast’s revenues, the increasing popularity of the company’s Xfinity bundling options is offsetting these headwinds. Subscriber losses will continue but the negative effects on the top line won’t be as bad as bearish analysts contend. At the same time, the company’s high-speed Internet subscribers are growing in number.

Comcast also manages to keep many cable customers loyal by incorporating features they love about the Internet and their smartphones. The company’s popular X1 set-top box, for example, recommends shows based on viewing habits, comes with a voice-controlled remote, and can seek out programs based on what’s trending on social media.

Despite its expensive acquisition of Sky, Comcast remains undervalued and its balance sheet is strong. The company sits on a cash hoard of $3.8 billion (most recent quarter) and generated robust free cash flow of $14.3 billion in 2018, up from $11.2 billion in 2017. Looking ahead, European-based pay-TV provider Sky will help Comcast establish a beachhead in overseas markets.

The average analyst expectation is for Comcast to generate year-over-year earnings growth of 13% next year. Over the next five years, earnings growth is expected to come in at 13.4%, on an annualized basis.

In today’s dog-eat-dog media/telecom landscape, Comcast is poised to not only survive but thrive.

John Persinos is the managing editor of Investing Daily.