Head-To-Head Review: Liberty Broadband (LBRDK) & Time Warner Cable (TWC)
Liberty Broadband (NASDAQ: LBRDK) and Time Warner Cable (NYSE:TWC) are both cyclical consumer goods & services companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.
Institutional and Insider Ownership
54.0% of Liberty Broadband shares are held by institutional investors. 10.8% of Liberty Broadband shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Time Warner Cable pays an annual dividend of $3.00 per share and has a dividend yield of 1.4%. Liberty Broadband does not pay a dividend. Time Warner Cable pays out 45.9% of its earnings in the form of a dividend. Liberty Broadband has raised its dividend for 8 consecutive years.
This table compares Liberty Broadband and Time Warner Cable’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Time Warner Cable||7.98%||21.59%||4.00%|
Earnings and Valuation
This table compares Liberty Broadband and Time Warner Cable’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Liberty Broadband||$30.59 million||536.81||$917.30 million||$0.10||903.00|
|Time Warner Cable||N/A||N/A||N/A||$6.54||32.04|
Liberty Broadband has higher revenue and earnings than Time Warner Cable. Time Warner Cable is trading at a lower price-to-earnings ratio than Liberty Broadband, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and price targets for Liberty Broadband and Time Warner Cable, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Time Warner Cable||0||0||0||0||N/A|
Liberty Broadband currently has a consensus price target of $95.00, suggesting a potential upside of 5.20%. Given Liberty Broadband’s higher probable upside, equities analysts plainly believe Liberty Broadband is more favorable than Time Warner Cable.
Liberty Broadband beats Time Warner Cable on 8 of the 12 factors compared between the two stocks.
About Liberty Broadband
Liberty Broadband Corporation holds interest in Charter Communications, Inc. (Charter) and its subsidiary Skyhook Holding, Inc. (Skyhook). The Company’s segments include Skyhook, Charter, and Corporate and other. Skyhook provides a wireless fidelity (Wi-Fi)-based location platform focused on providing positioning technology and contextual location intelligence solutions. Charter is an equity method investment that provides cable services in the United States, offering a range of entertainment, information and communications solutions to residential and commercial customers. Charter offers its customers subscription-based video services, including video on demand (VOD), high definition television, and digital video recorder service, Internet services and voice services. Skyhook’s Wi-Fi location solution can be used to help carriers and emergency personnel offer E-9-1-1 services domestically. Charter offers broadband communications solutions for businesses and carrier organizations.
About Time Warner Cable
Time Warner Cable Inc. (TWC) is a provider of video, high-speed data and voice services in the United States with clustered cable systems located in approximately five geographic areas, including New York State, the Carolinas, the Midwest, Southern California and Texas. The Company operates through three segments: Residential Services, Business Services and Other Operations. The Company’s residential services segment includes security and home management services. Its business services segment includes networking and transport services, including cell tower backhaul services, and enterprise-class, cloud-enabled hosting, managed applications and services. The Company serves approximately 15.9 million residential and business services customers. The Company also sells video and online advertising inventory to various local, regional and national customers.
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