Comcast’s Big Dividend Yield Has a Shrinking Cable Business Behind It. Is It Safe?
Comcast is paying a 6% dividend while its core cable business sheds hundreds of thousands of customers every quarter, and a corporate breakup is already underway. Whether that payout survives the split depends on a few numbers most income investors…
Comcast (NASDAQ:CMCSA | CMCSA Price Prediction) trades at $21.83, which puts its $1.32 annualized dividend at a forward yield of about 6.0%. The cable business behind that payout lost 144,000 domestic broadband customers and 274,000 video customers in the third quarter. Income investors need to know whether cash from a shrinking core can keep paying it.
Free Cash Flow Covers the Dividend With Room to Spare
Comcast generated $4.211 billion of free cash flow in the third quarter and paid $1.2 billion in dividends. That means the dividend used roughly 28% of free cash flow. Full-year 2025 looks much the same: $19.235 billion of free cash flow against $4.894 billion in dividends, or about 25%. Even with $6.8 billion of buybacks added in, total shareholder returns took about 61% of free cash flow.
Chairman and CEO Brian Roberts tied the cash to the breakup plan:
“We generated $4.2 billion in free cash flow and are making meaningful progress on the separation of NBCUniversal and Sky, which remains on track to create two independent companies with the financial strength and flexibility to pursue their respective growth strategies.”
Broadband and Video Shrink While Wireless Grows
- Domestic broadband revenue: $6.241 billion, down 4.7%
- Video revenue: $5.91 billion, down 8.7%
- Domestic wireless revenue: $1.05 billion, up 14.7%
- Business Services Connectivity: $2.645 billion, up 2.7%
- Peacock: $261 million of Adjusted EBITDA, its second straight positive quarter
Fiber and fixed wireless are driving the pressure. On the earnings call, Jason Armstrong said:
“It’s been more competitive in the second half than it has been in the first half, for sure.”
Steve Croney added that “gig pricing at $30 to $40, in some cases even less, is going to be really hard to sustain.”
Paused Buybacks Give the Dividend Breathing Room
Comcast stopped repurchases as of July 1 and expects the pause to last at least through the NBCUniversal and Sky separation, which is targeted for the middle of next year. Third-quarter repurchases came to just $10 million. Armstrong explained the thinking:
“Our priority is to provide the financial flexibility for both companies to pursue their respective growth strategies for the long term.”
Comcast holds $165.27 billion in total liabilities against $92.53 billion of equity and $7.596 billion in cash. Management expects both companies to emerge from the split with investment-grade balance sheets.
Dividend Raise Streak Has Stalled
Comcast raised its quarterly payout every year, from $0.23 in 2020 to $0.33 in 2025. The streak stopped in 2026: every declaration this year held at $0.33, including the October 22 declaration for the January 27, 2027 payment. The freeze reads as caution during the reorganization, not the kind of red flag that usually comes before a cut (we laid out the seven warning signs that do precede one in a free dividend trap guide). Coverage looks fine.
How Charter and Verizon Stack Up
Charter Communications (NASDAQ:CHTR) pays no dividend. In the second quarter, it produced $969 million in free cash flow against $93.8 billion in principal debt, and its internet losses grew to $ 172,000. Verizon (NYSE:VZ) pays $0.7075 a quarter, a yield near 6.5% at its October filing price. That payout rests on $7.801 billion of third-quarter free cash flow and $166.2 billion of debt. Comcast’s yield is close to Verizon’s, and its coverage compares well with both peers.
Verdict: Covered Today, but Keep an Eye on the Spin
With the dividend using roughly 28% of free cash flow, Comcast’s payout looks secure for now, even as broadband contracts. Investors should track three things: the fourth-quarter transformation charge of over $1 billion along with management’s expected reversal of positive cash timing; whether broadband losses narrow from 144,000; and how the board sets the dividend once NBCUniversal and Sky become a separate company.
Contact [email protected] for any questions or corrections.
Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
