4 Media Stocks That More Than Doubled The S&P 500 In 2019

Media companies have witnessed a mixed year so far. Although lack of political ad spending hurt the top line, increased cord-cutting and emergence of video streaming aided growth.

Moreover, media companies are gaining from rapid evolution of alternative distribution channels for broadcast and cable programming.

Growing preference for digital and subscription services over linear pay television and rental or outright purchase has compelled media companies to alter their business models.

Notably, traditional TV viewership continued to decline due to increased cord-cutting and the emergence of video streaming. Per eMarketer, 56.1 million U.S. households will be cord-cutters or cord-nevers by 2023.

The growing demand for virtual multichannel video programming distributor (vMVPD) services or “skinny bundles” has also been a key catalyst. These bundles help broadcasters keep pace with new consumption patterns and attract customers.

Additionally, growing demand for high-speed Internet has benefited the top line of industry participants. Greater Internet speed is driving demand for high-quality video and the trend of binge viewing.  

Further, big studios like Disney (DIS - Free Report) and Comcast (CMCSA - Free Report), which are coming up with their own streaming platforms, have preferred to keep their own content in-house.

This has prompted video streaming companies like Netflix (NFLX - Free Report) to spend more on developing original and quality content to counter competition and acquire more subscribers. Notably, the company is anticipated to spend an estimated $15 billion on developing original content this year.

Our Picks

Here we pick four media stocks that have returned more than double the S&P 500’s rally of 27.2% year-to-date, in 2019. Moreover, these stocks either carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). 

Phoenix, AZ-based Cable One (CABO - Free Report) is a leading broadband communications provider, serving residential and business customers through its Sparklight and Clearwave brands. The company sports a Zacks Rank #1 and has returned 85.6% year to date.

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