Comcast’s debt levels
In the first quarter, Comcast’s (CMCSA) long-term debt rose 64.1% YoY (year-over-year) to $104.5 billion. The company’s long-term debt stood at $107.3 billion in 2018, $59.4 billion in 2017, and $55.6 billion in 2015.
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Comcast faces debt pressure
The acquisition of British pay-TV group Sky, which closed in October 2018, increased Comcast’s debt considerably. The company’s debt was already high at that point due to its aggressive spending on scalable infrastructure, theme parks, and video streaming. AT&T’s (T) WarnerMedia, Walt Disney (DIS), and Apple are also set to launch streaming services to compete with established streaming rivals Netflix (NFLX) and Amazon (AMZN).
Comcast’s debt-reduction efforts
To reduce its debt in connection with its $40 billion Sky acquisition, Comcast stopped buying back stock in October 2018 and pays only dividends to reward shareholders. In Q1 2019, the company paid $869 million in dividends. As of April 28, Comcast’s dividend yield was 1.94%, whereas peers Walt Disney, CBS (CBS), and News Corporation (NWS) had yields of 1.26%, 1.40%, and 1.59%, respectively. Selling its ~30% stake in Hulu to Disney would surely help Comcast reduce its debt.