Critical Review: Charter Communications (CHTR) & Its Rivals

Charter Communications (NASDAQ: CHTR) is one of 32 public companies in the “Cable & other pay television services” industry, but how does it contrast to its competitors? We will compare Charter Communications to similar businesses based on the strength of its valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Institutional and Insider Ownership

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72.3% of Charter Communications shares are owned by institutional investors. Comparatively, 54.2% of shares of all “Cable & other pay television services” companies are owned by institutional investors. 0.8% of Charter Communications shares are owned by insiders. Comparatively, 10.9% of shares of all “Cable & other pay television services” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Charter Communications and its competitors revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Charter Communications $41.58 billion $9.90 billion 120.16
Charter Communications Competitors $12.86 billion $1.94 billion 55.73

Charter Communications has higher revenue and earnings than its competitors. Charter Communications is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of recent ratings for Charter Communications and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Charter Communications 1 6 15 0 2.64
Charter Communications Competitors 298 1479 2280 75 2.52

Charter Communications presently has a consensus target price of $408.18, suggesting a potential upside of 28.18%. As a group, “Cable & other pay television services” companies have a potential upside of 19.95%. Given Charter Communications’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Charter Communications is more favorable than its competitors.

Risk & Volatility

Charter Communications has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, Charter Communications’ competitors have a beta of 1.23, indicating that their average stock price is 23% more volatile than the S&P 500.

Profitability

This table compares Charter Communications and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Charter Communications 23.80% 1.11% 0.35%
Charter Communications Competitors 1,300.24% 29.22% 4.79%

Summary

Charter Communications beats its competitors on 7 of the 13 factors compared.

About Charter Communications

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.

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