Should ViacomCBS Stock Still Be on Your Radar?

Netflix and Disney stocks significantly outperformed VIAC in 2020

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Media conglomerate ViacomCBS Inc. (NASDAQ:VIAC) formed through the merger of CBS Corporation and Viacom. The company’s portfolio of major media brands includes CBS, MTV, Paramount, Nickelodeon, Comedy Central, Showtime, and the CW.

Earlier in December, ViacomCBS announced the appointment of Raffaele Annecchino as President and CEO of ViacomCBS Networks International. Annecchino succeeded David Lynn, who stepped down after 24 years with the company. Raffaele Annecchino came to ViacomCBS with a solid resume of just under 24 years of experience in two different leading roles for Viacom International Media Networks.

As 2020 draws to an end, ViacomCBS stock may still be down 14%, but continues to carve out a channel of higher highs in the wake of its March 18 11-year low near $10. The shares have since more than tripled, with their 80-day moving average containing all pullbacks. 

VIAC Stock Chart

Despite ViacomCBS' stock underperformance, the company was on par with Wall Street's expectations of it throughout earnings reports for 2020. VIAC beat quarterly earnings expectations on all three of its most recent reports, although only the May and August reports resulted in positive post-earnings moves. At the time of this writing, Wall Street anticipates that the VIAC earnings per share for the fourth quarter of 2020 will be $0.99.

ViacomCBS stock has a forward dividend of $0.96 and a forward dividend yield of 2.75%. The company last paid a dividend of $0.24. VIAC has paid dividends since 2006.

In a year where Netflix (NFLX) experienced historical growth and Walt Disney (DIS) completed its first full year running its new streaming platform, Disney+, ViacomCBS had reported notable decreases in both revenue and net profits. Most notably the company lost almost $2 billion in annual profits, which was significantly more than half of its net income in 2019. In addition, ViacomCBS lost roughly $2 billion in revenue. Other worrisome details for investors considering investing in VIAC include the $21.5 billion in debt and its inconsistent net income.

However, ViacomCBS' disappointing 2020 may have been an overall positive for value investors. Regardless of the company’s significant decline this year as compared to competitors, ViacomCBS has nearly doubled its annual revenue since 2016. ViacomCBS grew the total revenue by nearly $13 billion since 2016. At a forward price-earnings ratio of 8.30, ViacomCBS stock still presents decent value for investors. Furthermore, with a yield of 2.75%, long-term investors have the opportunity of receiving solid dividends for many years to come.

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