Charter Communications (CHTR) & Cable One (CABO) Head to Head Review

Charter Communications (NASDAQ:CHTR) and Cable One (NYSE:CABO) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, valuation, institutional ownership and dividends.

Profitability

This table compares Charter Communications and Cable One’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Charter Communications 23.59% 1.45% 0.45%
Cable One 24.78% 22.84% 6.76%

Volatility and Risk

Charter Communications has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, Cable One has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500.

Dividends

Cable One pays an annual dividend of $8.00 per share and has a dividend yield of 0.9%. Charter Communications does not pay a dividend. Cable One pays out 37.0% of its earnings in the form of a dividend. Cable One has increased its dividend for 2 consecutive years.

Valuation & Earnings

This table compares Charter Communications and Cable One’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Charter Communications $41.58 billion 1.80 $9.90 billion $2.65 121.88
Cable One $960.03 million 5.20 $234.02 million $21.61 40.55

Charter Communications has higher revenue and earnings than Cable One. Cable One is trading at a lower price-to-earnings ratio than Charter Communications, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

71.1% of Charter Communications shares are held by institutional investors. Comparatively, 78.4% of Cable One shares are held by institutional investors. 0.8% of Charter Communications shares are held by company insiders. Comparatively, 1.1% of Cable One shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Charter Communications and Cable One, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Charter Communications 1 4 12 0 2.65
Cable One 1 3 2 0 2.17

Charter Communications presently has a consensus price target of $363.62, indicating a potential upside of 12.29%. Cable One has a consensus price target of $805.33, indicating a potential downside of 8.15%. Given Charter Communications’ stronger consensus rating and higher possible upside, analysts clearly believe Charter Communications is more favorable than Cable One.

Summary

Cable One beats Charter Communications on 9 of the 17 factors compared between the two stocks.

Charter Communications Company Profile

Charter Communications, Inc., through its subsidiaries, provides cable services to residential and commercial customers in the United States. It offers subscription-based video services, including video on demand, high definition television, digital video recorder, pay-per-view, spectrum guide services, and a package of basic video programming, as well as ad-supported free online video products. The company also provides Internet services, such as security suite that protects computers from viruses and spyware; in-home WiFi, which permits customers to lease high performance wireless routers to enhance their in-home wireless Internet experience; out-of-home WiFi; parental control features; and residential Internet services. In addition, it offers voice communications services using voice over Internet protocol technology; and broadband communications solutions, such as Internet access, data networking, fiber connectivity, video entertainment, and business telephone services to cellular towers and office buildings for business and carrier organizations. Further, the company provides video programming and music, Web hosting, email and security, and multi-line telephone services, as well as Web-based service management; and sells video and online advertising inventory to local, regional, and national advertising customers. Additionally, it offers fiber-delivered communications and managed information technology solutions; and security and home management services, as well as owns and operates regional sports networks and local sports, news, and lifestyle channels. As of December 31, 2017, the company served approximately 27.2 million residential and business customers. Charter Communications, Inc. was founded in 1999 and is based in Stamford, Connecticut.

Cable One Company Profile

Cable One, Inc. owns and operates cable systems that provide data, video, and voice services in the United States. The company offers data services, including home.cableone.net, an Internet portal that provides various email addresses; and WiFi ONE, a Wi-Fi solution to enhance Wi-Fi signal throughout the home. It also provides video services, such as basic video services comprising local networks; local community programming that include governmental and public access; and other channels, which comprise weather, shopping, and religious channels, as well as digital video services, including national and regional cable networks, music channels, and an interactive electronic programming guide with parental controls. In addition, the company offers premium channels; and advanced video services, such as whole-home DVRs and high-definition set-top boxes, as well as TV Everywhere product, which enables its video customers to stream various channels and shows to mobile devices and computers. Further, it provides voice and international calling by the minute services; and a suite of digital advertising products comprising Website construction, targeted display, and short- and long-form video production. As of March 1, 2018, the company served approximately 800,000 residential and business customers in 21 Western, Midwestern, and Southern states. Cable One, Inc. was founded in 1986 and is headquartered in Phoenix, Arizona.

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