Comcast's broadband worth more than all of TWC

We estimate Comcast's value to be around $72.5 billion and furthermore estimate that its broadband business constitutes about 35% of this estimated value. The 35% figure comes from estimated cash flows contributed by the broadband business and the expected growth in these cash flows. This implies that Comcast's broadband business is worth $25 billion. In return, we estimate that TWC's total value is around $21 billion, implying that Comcast's broadband business alone is worth more than Time Warner Cable.

The value of each broadband division

If we just compare our estimates for the value of each broadband division, Comcast's broadband business is worth nearly 2.9 times as much as Time Warner Cable's business.

A quick look at fundamental cost drivers suggests that capital expenditures as then as operating margins are after a fashion similar for the two. Revenue drivers suggest that during the average fee per subscriber is similar for the two companies, Comcast's broadband market share is nearly twice that of Time Warner Cable. In this way, intuitively one might think that Comcast's broadband business should be worth twice as much as Time Warner Cable's. Nevertheless, Time Warner Cable's higher leverage makes the stock more volatile and sensitive to changes in fundamental value drivers, along these lines pulling down its value.

While comparing Comcast's broadband division to Time Warner's is undoubtedly not an apples-to-apples comparison given the difference in scale, it's interesting to see just how valuable these companies' broadband networks have become.