Time Warner Cable Inc. (NYSE:TWC) March 16, 2015

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TWC-US
Implied Price
OVERVALUED
128.78 159.94
A Price as of Close Mar 13 154.97 USD
B CapitalCube Median Implied Price 146.77 USD * CapitalCube Price is over trading range * CapitalCube Price is below trading range
CapitalCube Estimate Range 141.96 - 151.57 USD NA
52 Week Range 128.78 - 159.94 USD
Earnings Momentum Score
 0  100
A Earnings Score (TWC) 22.77
B Earnings Score(Peer Median) 22.77
Latest Filing date December 31, 2014
Fundamental Score
 0  100
A Fundamental Score (TWC) 53
B Fundamental Score(Peer Median) 53
Dividend Score
 0  100
A Dividend Quality Score (TWC) 50
B Dividend Quality Score (Peer Median) 67
Dividend Yield
1.52 5.65
A Dividend Yield (TWC) 1.94
B Dividend Yield (Peer Median) 2.65
Analysis
Unlock The Complete Analysis →

Fundamental Analysis

Capital Investment Strategy The company's capital investment program suggests it is under-investing in a business that is producing peer median returns.

The company's capital investment program suggests it is under-investing in a business that is producing peer median returns.

Earnings Leverage Compared with its chosen peers, changes in the company's annual earnings are better than the changes in its revenue, implying better than median cost control and/or some economies of scale.

Compared with its chosen peers, changes in the company's annual earnings are better than the changes in its revenue, implying better than median cost control and/or some economies of scale.

Leverage & Liquidity TWC-US seems to be constrained by the current level of debt.

TWC-US seems to be constrained by the current level of debt.

Relative Valuation Time Warner Cable Inc.'s current Price/Book of 5.43 is about median in its peer group.

Time Warner Cable Inc.'s current Price/Book of 5.43 is about median in its peer group.

Valuation Drivers TWC-US's operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.

TWC-US's operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.

Drivers of Margin The company's margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.

The company's margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.

Growth Expectations While TWC-US's revenues in recent years have grown faster than the peer median, the market gives the stock a PE ratio that is around peer median suggesting that the market has some questions about the company's long-term strategy.

While TWC-US's revenues in recent years have grown faster than the peer median, the market gives the stock a PE ratio that is around peer median suggesting that the market has some questions about the company's long-term strategy.

Operations Diagnostic TWC-US's relative asset efficiency and net profit margins are both around the median level.

TWC-US's relative asset efficiency and net profit margins are both around the median level.

Sustainability of Returns TWC-US's return on assets currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.

TWC-US's return on assets currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.

Likely Corporate Actions

Dividend Action

While TWC-US has a high quality dividend, its cash cushion is weak. In addition, its relative operating performance is not strong enough to suggest an increase in the dividend.

Equity Action

The company's current share price is not sufficiently lower than its 52-week high (currently about 3.11% below) and does not justify a share buyback as the best use of cash at this time.

M&A Action

While TWC-US has the size (by book value) to acquire other firms within this peer group and may need to do so to meet the market's growth expectations, it may not be able to add more goodwill to the balance sheet.

Dividend Quality

Dividend Coverage Weak

The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future.

Dividend Quality High Quality

High Quality: Dividends that are fully covered from operating and investing cash flow, net of any cash outflow from debt repayments and net of a decrease in deposits (for banks) are considered to be high quality. For more information, please refer to the Corporate Actions report.
Over the last twelve months (prior to December 31, 2014), TWC-US paid a high quality dividend, which represents a yield of 1.94% at the current price.

Dividend Quality Trend

Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years -- of these 3 were high quality and 2 were low quality.

Accounting Red Flags

Accounting Quality

TWC-US's net income margin for the last twelve months is around the peer median, which combined with a relatively conservative accrual policy suggests possible understatement of its reported net income.

Management of Reserves Strong Buildup

Strong Buildup: Company's percentage of Accruals is above zero and higher than peer median -- usually indicative of a Company building its Reserves in a strong manner relative to peers.
The company's accrual levels over the last twelve months are both positive and greater than the peer median suggesting the company is not only building reserves but is doing so in a relatively strong manner compared to its peers.

Material Categories

Excluding the effects of change in revenue, the accounting categories causing the most impact on the movement of net income from the prior period to the current period are SG&A, Intangible Assets and Business Combination Reserves.
Characteristics
Key Valuation Items

Price to Book (P/B)

5.43

Price to Earnings (P/E)

21.58

Price to Sales

1.91

Price / EBITDA

5.29

Price to Assets

0.90

Price / FCF

19.32

EV / EBITDA

7.99

EV / FCF

29.17

Dividend Yield

1.94

PEG Ratio

3.22
Profitability

Gross Margin

45.68

EBIT Margin

21.29

Net Margin

8.84

FCF Margin

9.88

Operating Margin

21.29

Pre-Tax Margin

14.24

ROE

26.96

ROIC

6.33

ROA

4.17
Efficiency

Debt / Equity

295.85

Debt / Market

55.55

Debt / Book

Debt / EV

36.09

Coverage Ratio

25.37

Interest Coverage

3.42

Cash Days

9.86

Working Cap. Days

Receivable Days

15.22

Payable Days

9.06

Inventory Days

0.00

Sales / Assets

0.47
Growth

Earnings Growth YOY

3.76

Revenue Growth YOY

3.13

Oper. CF Growth YOY

10.38

EPS Growth YOY

6.70

FCF Growth YOY

-11.82
Price History

Peers

FA Score

DQ Score

close

52 week range

154.97

128.78

159.94

USD

85.18

72.28

89.46

USD

32.76

32.07

37.48

USD

48.84

45.09

53.66

USD

33.40

33.02

42.46

USD

84.09

59.86

88.13

USD

68.35

63.50

89.64

USD

Company Profile

Time Warner Cable, Inc. provides video, high-speed data and voice services in the United States. The company offers its residential and business services customers with video, high-speed data and voice services over its broadband cable systems. Its business services also include networking and transport services and, through its wholly owned subsidiary, NaviSite, Inc., manages and outsources information technology solutions and cloud services. It also provides advertising to a variety of national, regional and local customers. Time Warner Cable was founded on March 21, 2003 and is headquartered in New York, NY.

Closing Stock Price

USD 154.97

As of Date

March 13, 2015

One Year Performance

12.7136%

One Month Performance

3.49271%

Industry Group

Cable/Satellite TV

52 wk. Range

USD 128.78 - USD 159.94

Market Cap (Millions)

USD 43531.1

Total Shares Outstanding

280.8
Latest Filing Dates

Annual

December 31, 2014

Semi Annual

N/A

Quarterly

December 31, 2014

Next Release Date

April 23, 2015

Filing Currency

USD

Listed Exchange

NYSE
Peers


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Capital Market Laboratories
20h
$DTV , $TWC , $LBTY.A , $DISH , $SIRI Revenue Trend Comparison #CML http://stks.co/t1hMY
Mar 15 10:12 AM
Capital Market Laboratories
2d
$DTV , $LBTY.A , $TWC , $DISH , $SIRI Revenue Trend Comparison #CML http://stks.co/r1gw2
Mar 13 10:12 PM
ThudderWicks
2d
#FCC Pauses Consideration of $CMCSA $TWC Comcast-Time Warner Cable Deal http://stks.co/s1gho
Mar 13 8:19 PM
Thanh N
2d
$TWC $T $CMCSA $DTV What does this mean? http://stks.co/s1gfY
Mar 13 7:12 PM
2
Capital Market Laboratories
3d
$DISH , $TWC , $DTV , $LBTY.A , $SIRI Assets Trend Comparison #CML http://stks.co/b1snu
Mar 13 5:27 AM
TheStreet
3d
Time Warner Cable 'Actively Pursuing' Talks to Finally Lift Dodger Blackout $TWC http://stks.co/s1gLw
Mar 13 12:6 AM
Insider Monkey
4d
Billionaire John Paulson’s Long-Term Bets: $TWC , $MNK and More http://stks.co/i1xOL
Mar 12 4:23 PM
Analyst Ratings Network
4d
Analysts Give Average Rating of Hold to Time Warner Cable $TWC http://stks.co/t1gWS
Mar 12 1:10 PM
Stockmarketsvane.com
4d
Swing Buy Picks: $FSLR , $TWC , $WWAV http://stks.co/b1sLC
Mar 12 12:9 AM
1
Tad Doughty
5d
More people moving to on demand video. I know I prefer streaming/VOD. What about you? $AMZN $NFLX $CMCSA $TWC http://stks.co/c1sJK
Mar 11 3:37 PM
Capital Market Laboratories
5d
$TWC , $DTV , $LBTY.A , $DISH , $SIRI Book Value Trend Comparison #CML http://stks.co/b1rx6
Mar 11 5:18 AM
Don Hawkins
5d
$TWC Is this the time to buy TWC?
Mar 11 5:2 AM
Chopper Reid
5d
$AAPL Long ago...I knew I had to trade on my own...when I found out my broker thought he was buying me The Weather Channel $TWC
Mar 10 7:43 PM
2 4
Capital Market Laboratories
6d
How the Option Market Prices Risk for Media http://stks.co/p1fdp #CML - $DIS $CBS $FOXA $AMC $TWC $WWE
Mar 10 3:15 PM
Wayne Duggan
6d
6 Takeaways From Mobile World Congress Day 3: http://stks.co/q1fPJ $ERIC $RKUS $CMCSA $TWC $HPQ $ARUN $JNPR $BRCD $NTT $FFIV $CSCO $VMW
Mar 10 1:15 PM
2
Mar 10 1:24 AM
Conference Call Transcripts
6d
Time Warner Cable Inc's EVP & Chief Gov. Aff. Officer just cashed-in 11,593 options http://stks.co/p1fMk $TWC
Mar 9 10:19 PM
Conference Call Transcripts
6d
Time Warner Cable Inc director just disposed of 910 shares http://stks.co/r1f9j $TWC
Mar 9 9:53 PM
Insider Trades
6d
$TWC : New Insider Transaction on TWC by Director Castro Thomas H: http://stks.co/j1wEk
Mar 9 9:53 PM
Ophir Gottlieb
6d
Option Market Price Risk for Media http://stks.co/b1rHh - $DIS $CBS $FOXA $AMC $TWC $WWE
Mar 9 7:6 PM
1
Ophir Gottlieb
7d
$DISH , $TWC , $DTV , $LBTY.A , $SIRI Book Value Trend Comparison #CML http://stks.co/f1w4S
Mar 9 6:20 PM
Ophir Gottlieb
7d
How the Option Market Prices Risk for Media http://stks.co/p1fBf - $DIS $CBS $FOXA $AMC $TWC $WWE
Mar 9 4:45 PM
TheStreet
7d
New Lifetime High Reached By Time Warner Cable (TWC) $TWC http://stks.co/q1ew2
Mar 9 2:2 PM
Eric Levine
7d
$TWC Price Breakout to Highs, with RS vs S&P 500 Breaking out... http://stks.co/a1r7R
Mar 8 11:37 PM
Ophir Gottlieb
8d
How the Option Market Prices Risk for Media http://stks.co/j1vdK - $DIS $CBS $FOXA $AMC $TWC $WWE
Mar 7 8:20 PM
1
Becky Hiu
9d
Pretty ugly today, but banks were bright spots ($BAC $PNC ), $EBAY $TWC $TWX , insurers $MET $PRU (mentioned before). http://stks.co/t1ea7
Mar 6 10:16 PM
1
Paul La Monica
9d
Interesting mix of stocks hitting all-time highs today on this Freaky Fed Friday. $CMCSA & $TWC , $EBAY , $FL , $PNC
Mar 6 6:56 PM
1
Zacks.com
9d
Time Warner Cable has scaled to a 52-week high. Will it continue to go up in the near future? $TWC http://stks.co/t1eSe
Mar 6 6:39 PM
Paul Elliott
10d
Mar 6 6:8 PM
Santikos Capital
10d
Short $TWC . Target 148
Mar 6 4:8 PM
1
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Closing Stock Price

USD 154.97

As of Date

March 13, 2015

One Year Performance

12.71%

One Month Performance

3.49%

Industry Group

Cable/Satellite TV

52 wk. Range

USD 128.78 - USD 159.94

Market Cap (Millions)

USD 43,531.1

Total Shares Outstanding (Millions)

280.80
Latest Filing Dates

Annual

December 31, 2014

Semi Annual

N/A

Quarterly

December 31, 2014

Next Release Date

April 23, 2015

Filing Currency

USD

Listed Exchange

NYSE
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