Things are getting pretty bad in the media space.Comcast-Apple-TV

Last week’s media selloff saw many of the major media stocks down more than 10%.

One that held up better than the rest is Comcast (NASDAQ: CMCSA). Shares were down just 5% last week, and this comes as the company is looking to actively attract the millennial audience.

Comcast is one of the biggest media companies in the business, next to The Walt Disney Co. (NYSE: DIS). Like Disney, Comcast is a media and entertainment leader with cable and broadcasting holdings, theme parks and film assets. Its film studio is responsible for the likes of “Jurassic World,” and it’s boosting its efforts in the content creation business.

Buyout Targets

Comcast walked away from its attempted purchase of Time Warner Cable (NYSE: TWC) some three months ago. Since then, shares are essentially flat. It has to find a new way to grow. Hence, the company’s recent angling toward buying a “younger” media company.

Some of the media assets that could be Comcast buyout targets are the ones that are having success with attracting millennial viewers.

The likely targets include Business Insider, BuzzFeed and Vice Media. An increased presence in digital media would be a big positive for a media company that already has a presence in many U.S. households. Comcast certainly has the strong balance sheet and financial flexibility to make a key deal.

Younger generations just aren’t watching as much TV anymore. By buying the likes of a Vice, Comcast would be able to develop programs for its cable networks and gain access to online ad and licensing TV show revenues.

Following Disney’s Lead

But Comcast is also looking to turn itself into more of a theme park company by investing more money into that part of the business. This includes investing into its Universal Orlando park and its theme park in California. The plan is to spend money on resorts and new attractions to drive traffic and to cross-sell consumer goods and films.

Then there’s the partnership with Chinese companies to build a $3 billion theme park in Beijing. The thing here is that theme parks are growing faster than movies and cable. With this type of focus, the idea is that Comcast’s stock could start to perform more in line with Disney. Comcast shares are up just under 10% for the last year; Disney, despite last week’s selloff, is up 26%.

With Comcast, you’ve got a $147 billion market cap company that offers a 1.7% dividend yield. It’s certainly an enticing income play, despite the seemingly low yield. Comcast has upped its dividend for four straight years. Its dividend payout ratio is a low 30%. Comcast is benefiting from a slow and steady increase in subscribers, which should continue to support its dividend.

Comcast is trading at a price-earnings ratio of 16 based on next year’s earnings estimates, while top competitor Disney trades at a forward P/E of close to 20.

A couple potential alternative growth opportunities for Comcast could be the smaller media companies. AMC Entertainment (NASDAQ: AMCX) has a $5.5 billion market cap. Its shares fell 10% last week. Then there’s Starz (NASDAQ: STRZA), which is a $3.8 billion market cap company. Its stock is down 13.5% over the last month.

The key catalyst for Comcast could be its push to gain access to the younger audience. But the real beauty of Comcast is its size. It’s the largest cable operator in the U.S. It can offer phone, TV and Internet in a bundle – giving it a key advantage over some of the other media players.

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Published by Wyatt Investment Research at