How The Good Wife Can Make CBS a Good Partner

How The Good Wife Can Make CBS a Good Partner

CBS and Comcast recently formed an agreement that has the potential to increase viewership for both parties. While the majority of this article will focus on these two companies working together to improve their operations, it will conclude with which one is likely to offer a better investment opportunity.

Increased offerings
Prior to moving forward, let's first establish that Comcast's Xfinifty On Demand features current television shows while its Xfinity Streampix features past television favorites.

Through the aforementioned deal, Comcast and CBS will offer more content for both Xfinity On Demand and Xfinity Streampix. This benefits Comcast because it increases Xfinity content. It benefits CBS because it allows viewers to catch up on current television shows.

For instance, if a circle of friends or people at work are constantly talking about The Good Wife, and you feel left out, you can catch up via Xfinity on Demand, hang with the conversation, and then stay up to date with recent shows. This, in turn, drives ratings for CBS.

Speaking of The Good Wife, you can catch past seasons on Xfinity Streampix if you want to get all the way caught up. The Good Wife has an IMDB rating of 7.7 on based on 36,561 votes, so the odds are good that you will feel satisfied. You can also catch past seasons of Charmed on Xfinity Streampix. However, Charmed only sports an IMDB rating of 6.7 based on 36,528 votes -- not so hot.

Other CBS shows available on Xfinity include 2 Broke Girls (IMDB rating of 6.7 based on 38.419 votes), Person of Interest (IMDB rating of 8.2 based on 58,543 votes), The Mentalist (IMDB rating of 8 based on 81,924 votes), and The Crazy Ones (IMDB rating of 6.7 on 81,924 votes). There are some hits and misses there, but interest in successful shows should offset a lack of interest in the lesser quality shows.

Xfinity, by the way, offers some home runs, including Homeland (IMDB rating of 8.5 on 112,743 votes), The Walking Dead (IMDB rating of 8.7 on 312,372 votes), and Boardwalk Empire (IMDB rating of 8.7 on 80,977 votes).

When looking at the IMDB numbers, keep in mind that the number of votes is just as important as the rating, since vote totals indicate popularity.

Netflix's deal for an even higher-rated show
You might be wondering what show could rate higher than Homeland, The Walking Dead, and Boardwalk Empire. That would be Showtime's Dexter, which sports an IMDB rating of 9 based on 313,859 votes. It's not only the highest-rated show mentioned in this article, but the most popular as well. To make this story simpler, it should be noted that Showtime is a subsidiary of CBS.

Dexter recently finished its run on Showtime on September 22, attracting 2.2 million viewers. Netflix has obviously been paying attention to Dexter's popularity, considering it just inked a deal to stream all eight seasons of Dexter for its paid subscribers.

On Netflix, the first four seasons will be available to United States members on Halloween -- a fitting date considering the show is about a blood-spatter-pattern analyst for the police who moonlights as a serial killer. The remaining four seasons will be available on New Year's Day. For Netflix, this is a big content win with strong potential to drive viewership considering the show's past success.

Getting back to CBS, it's also continuing its strategic moves, renewing Season 2 of Under the Dome with Amazon.

CBS vs. Comcast
CBS has seen its stock appreciate 80.42% over the past year, whereas Comcast has seen its stock grow 35.10%. However, CBS sports a market cap of $35.92 billion versus a market cap of $126.63 billion for Comcast, giving Comcast more resiliency to bear markets since it's a bigger ship to turn.

In the meantime, CBS and Comcast are trading at 22 and 19 times forward earnings, respectively, while CBS sports a net margin of 11.56% and Comcast sports a net margin of 10.62%. One key metric that shows some separation is their dividends. CBS currently yields 0.80%, whereas Comcast yields 1.60%.

The bottom line
CBS and Comcast are both likely to be long-term winners. If you want more resiliency and higher dividend payments, consider Comcast. Otherwise, CBS management has been on a tear as of late, and it doesn't look like they plan on slowing down. The growing popularity of online content providers has opened a lot of doors for CBS, and that momentum should continue.

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