Motley Fool: Bargain-priced Media giant

With a recent market value of $156 billion, Comcast is a global multimedia powerhouse, boasting 57 million customer relationships across the U.S. and Europe. It offers broadband, wireless and video service via its Xfinity, Comcast Business and Sky brands, and delivers entertainment, sports and news via Universal Filmed Entertainment Group, Universal Studio Group, Sky Studios, the NBC and Telemundo broadcast networks, multiple cable networks, Peacock, NBCUniversal News Group, NBC Sports, Sky News and Sky Sports. But wait – there’s more! It’s also the owner of Universal Parks and Resorts.

Comcast is still growing, too. Peacock more than doubled its paid subscribers from 2021 to 2022, to more than 20 million.

In the same period, total revenue for the company grew 4.3% to $121 billion. In January, the company also boosted its dividend payout by 7.4%; the dividend recently yielded 3.1%.

The U.S. broadband market is fairly saturated, so Comcast has pivoted to offering more wireless services. It also expects further growth in part from a new theme park in Texas geared to young families and a horror-focused attraction in Las Vegas.

Comcast shares are attractively priced, with a recent forward-looking price-to-earnings (P/E) ratio of 10. (The Motley Fool has recommended Comcast.)

Ask the Fool

Q. I occasionally see references to people amplifying gains using debt. How does that work? – A.L., Lima, Ohio

A. This is referred to as investing “on margin” when you do so through your brokerage.

Here’s a simplified (and somewhat extreme) example: Imagine that you invest $100,000 in stocks and they double in value, to $200,000. You gained $100,000!

But what if you had $100,000, borrowed $100,000, and invested $200,000 in stocks that doubled? You’d gain $200,000, ending up with $400,000. After paying back the $100,000, you’d have $300,000 left. See how that gain was amplified?

Using debt sounds marvelous – unless you lose money. In the example above, if the stocks fell by 50%, you’d have $50,000 left if you hadn’t borrowed money. But if you’d borrowed that $100,000 in order to invest $200,000, it would have shrunk to $100,000 – which you’d owe to your lender, leaving you with $0. Debt amplifies both gains and losses, which is why it’s arguably best to steer clear of investing on margin.

Q. Which websites are good for researching and comparing mutual funds? – T.P., Lubbock, Texas

A. Morningstar.com is a terrific mutual fund resource, where you can learn about the performance, fees, taxes, holdings and much more of thousands of funds.

The Financial Industry Regulatory Authority, or FINRA, has a handy fund analyzer tool at FINRA.org/fundanalyzer, letting you compare fees and performances of various funds. (Inexpensive index funds often outperform managed funds, even if the managed funds sport higher pre-fee returns, so include fees in your comparison.)

Both those websites can help you learn more about mutual funds in general, too.

My dumbest investment

My worst investment move was trying to jump onto what I thought might be big short-term opportunities to make quick returns. I invested in agricultural chemical companies because supplies were strained around the world after Russia invaded Ukraine.

Luckily, they were relatively small positions.

I quickly realized that I couldn’t stomach these investments, as I was thinking about them way too often – including right before going to bed. I did get lucky with a couple of them: Though they fell 30% almost immediately after I bought, the prices then shot up, and they paid generous enough dividends to give me only a small overall loss.

I learned some lessons: Only buy companies you are willing to hold for several years at the least, and invest in cyclical stocks only if you have a solid thesis for the sector and its potential. – Ken, online

The Fool responds: Those lessons can apply to any stocks you buy. Be sure to always research a company before investing, so that you have good reasons to expect it to grow in value over time.

Aim to hang on to the stocks you buy for at least a few years, to give the companies time to perform and to recover from any short-term drops.

Your investments sound like they were too speculative. It’s risky to put money into investments in which you don’t have a lot of confidence.