DirecTV Latin America worth almost as much as Dish
DirectTV growth has been rapid and there is still potential for more.
Although Dish has started to make some critical investments to make itself more valuable, its current valuation and our estimates for the two companies present an interesting relative view of DirecTV's success compared to Dish's. The two very similar companies have seen a noticeable divergence in terms of their subscriber bases and overall performance, and the magnitude of difference in their growth is astounding.
Our price estimate for DirecTV stands at $53, a premium of about 20% to the market price.
Obviously, our estimate of DirecTV's value is substantially higher than our valuation for Dish, given the massive difference in subscriber count. However, what is somewhat surprising is the fact that our estimate of DirecTV's Latin American business is approaching that of Dish's overall pay-TV business.
We estimate that DirecTV's Latin American pay-TV business is worth a little more than $10 billion. This value would be even higher if we included the company's equity investment in Sky Mexico, which it does not consolidate in its Latin American results. On the other hand, we estimate that Dish Network's pay-TV business in the U.S. (which excludes Blockbuster and equipment sales) is worth a little more than $12.5 billion. What does this tell us?
A segment in which DirecTV had just over 3 million subscribers four years ago is now rivaling Dish Network's established business in the U.S. in terms of overall value. DirecTV has successfully demonstrated that the Latin American market offers vast potential. Although its subscriber base is lower than that of Dish, growth has been rapid and there is still potential for more.
On the other hand, Dish Network's subscriber growth has decelerated. Dish will need to unveil some ambitious growth plans (which is certainly a possibility given its large spectrum position) in order to make this a legitimate rivalry once again.
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The retailer labels the character's fake memoir as non-fiction. This comes weeks after it categorized the the Bible as fiction.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.