3 Reasons I Bought Comcast This Week

One of this week's early news makers was Comcast (NASDAQ: CMCSA). Shares of the slumbering media and connectivity giant opened 18% higher on Monday after the company announced plans to spin off its NBCUniversal media assets, leaving Comcast with the cable TV and broadband business that accounts for more than half of its revenue and most of its profitability.

Comcast had already completed the spinoff of Versant Media in January. It gave its linear cable properties -- including CNBC, USA, MS Now, and E! -- and select digital platforms led by movie ticketing site Fandango and reviews aggregator Rotten Tomatoes their own stock. It hasn't really worked out so far, with both investments trading lower since going their separate ways.

It should be different this time. When the initial euphoria of the NBCUniversal spinoff started to wear off by Monday afternoon, with the stock giving back most of its earlier upticks, I became a Comcast shareholder. It's not my first time investing in this frustrating conglomerate. Let me go over the reasons why I have come back.

Image source: Getty Images.

1. The parts are greater than their sum

You would think that a stock that popped 18% higher on Monday would be in pretty good shape for recent investors, but that's not the case. Comcast stock is still down 4% over the past month, 15% year to date, and 29% over the past year. Monday's spike on the spinoff news suggests that there's more value in splitting the business this way. Reality has a potent counter, complete with stock charts over the past month, six months, and year.

It also doesn't help that Versant's spinoff six months ago has been a disappointment. In its first quarter as a stand-alone business, Versant delivered a 1% decline in revenue and a 22% drop in attributable net income. NBCUniversal isn't likely to follow suit.

Investors craving the creature comforts of high income but willing to put up with cord-cutting at Xfinity and overall sluggishness at Comcast Business can still enjoy the parent company's 5.5% yield. NBCUniversal offers more vibrant media content than Versant, a growing collection of theme parks, and a business that will likely continue to grow when the spinoff is complete next year.

2. Media and theme parks are hot right now

There have been back-to-back years of media giants being gobbled up at healthy premiums. Content isn't just king. It's also checkmate.

Amusement park operators are also having a market-thumping glow-up in 2026. The industry was a brutal laggard last year, but that's not the case for the largest operators of gated attractions. Six Flags Entertainment -- the country's largest operator of regional amusement parks following the combination with Cedar Fair -- is trading 37% higher this year. As the parent company of SeaWorld and Busch Gardens, United Parks has climbed up a 31% lift hill in 2026. No one is growing faster in the parks space over the past year than Comcast, with last year's debut of Epic Universe in Florida, last week's opening of Universal Kids in Texas, and a new park starting to break ground in the United Kingdom.

Walt Disney and Comcast operate most of the world's most popular theme parks, but neither one is beating the market this year. Their gated attractions are still growing, but market sentiment isn't favoring their asset collections right now. Comcast's spinoff should help.

3. Comcast is still cheap

We will get a clearer picture of each entity's valuation and what's being swept into the NBCUniversal rug next year. In the meantime, Comcast trades at a steep discount to the overall market.

You can buy Comcast at a market cap that is just 5 times trailing earnings and double its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). After the spinoff, it's likely that the parent company's dividend yield will go higher. NBCUniversal should become laser-focused on exploring growth opportunities.

Rick Munarriz has positions in Comcast, Versant, and Walt Disney. The Motley Fool has positions in and recommends Six Flags Entertainment and Walt Disney. The Motley Fool recommends Comcast and United Parks & Resorts. The Motley Fool has a disclosure policy.