Philip Cusick, Managing Director at J.P. Morgan, recently shared his top stock picks for the entertainment sector. Cusick has won the prestigious Institutional Investor All-America accolade for his wireless coverage, and in this recent interview he delves in some of the central themes in the intersection between telecommunications and entertainment, including mergers and acquisitions, dividends yields and the growth of data usage.
Cusick’s favorite pick is Comcast Corp. (CMCSA). “Our three favorite stocks today over the next 12 to 18 months — number one is Comcast. I think it’s the best large-cap company that we cover. I think it’s a company you can buy and put away,” Cusick said. He also says that CMCSA is expected to grow dividends by 20% to 30% next year from its current 1.5% to 2% range.
“Number two would be SBA Communications (SBAC), sort of a small tower company,” Cusick said. “Among the tower companies, it’s the most aggressive sort of user of leverage that is international. It’s growing the U.S. business a little bit faster than its competitors, and it’s the most aggressive in terms of using the balance sheet to juice up returns.”
“And number three would be a company called Charter (CHTR), which is a small cable company. We think Charter is a little bit more of a great longer-term story, not necessarily that things are going to go great in the near term, because they’re really turning the business around. But I think longer term, Charter has a huge opportunity to grow the video subscriber base, grow its subscriber base and grow their cash flow generation in a tremendous way,” Cusick said.