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Can Comcast Keep Returning Value to Its Shareholders?

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Feb. 26 2018, Updated 10:30 a.m. ET

Consistently returning value to shareholders in 4Q17

Comcast (CMCSA) has impressed its shareholders with attractive dividends for the past few years. It also buys back shares consistently to return value to its shareholders. In 2017, it returned a total capital of $7.9 billion to its shareholders through dividends and buybacks, compared to $7.6 billion in 2016 and $9.2 billion in 2015.

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Share buyback trend

In 4Q17, Comcast paid back $1.2 billion worth of capital to its shareholders through buybacks of 32.4 million shares. The company now has a $7 billion value of shares available at the end of December 31, 2017, under the share repurchase authorization. Comcast’s board of directors increased its share repurchase program to $12 billion, effective in January 2017. The company is set to return at least $5 billion to its shareholders through share buybacks in 2018. It repurchased shares of $5 billion in 2017, $5 billion in 2016, and $6.8 billion in 2015.

Dividend payments

Comcast paid dividends of $736 million in 4Q17 and $2.9 billion in 2017. In January 2018, the company’s board approved an annualized dividend increase of 21% to $0.76 per share, making it the tenth year of dividend increases. The company will pay a quarterly dividend of $0.19 per share on April 25, 2018, to its shareholders of record as of April 4, 2018.

As of February 8, 2018, Comcast’s dividend yield was 2% compared to The Walt Disney Company (DIS) at 1.7%, CBS (CBS) at 1.4%, and News Corporation (NWS) at 1.3%.

Strong free cash flow drives capital return policy

Comcast exited 4Q17 with free cash flow of $2 billion compared to $2.6 billion in 4Q16. It has maintained a minimum free cash flow of $2 billion in each of the last five quarters. A steady free cash flow could allow the company to move forward with its ongoing capital return policy.

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