It’s time to put Comcast (NASDAQ:CMCSA) in the Dow Jones Industrial Average. The blue-chip index needs more representation from the content and distribution industry if it wants to remain a proxy for the American economy.
Comcast is the nation’s biggest cable company, largest residential Internet provider and a top-three telephone provider. It also owns a majority stake in NBC Universal, making it a big player in network TV and Hollywood. The company also has major interests in a number of cable channels.
In short, Comcast is a diversified media company, both in creating it and distributing it. If the Dow is supposed to be a sort of proxy for the U.S. economy, it could do with more representation from the entertainment sector. As it’s currently constituted, the Dow claims just one content creator/distributor: Walt Disney (NYSE:DIS).
As for value, volume and share-price profile, Comcast also fits well with the blue-chip index. It certainly has the market cap to warrant an elevation to the Dow. Indeed, with a total stock market value of $85 billion, it’s among the handful of S&P 500 companies that big that are not in the Dow.
Additionally, with the stock trading at about $30, Comcast wouldn’t have any kind of out-of-whack influence on the Dow, which is weighted by share price. Comcast would have roughly the same influence on the index as JPMorgan Chase (NYSE:JPM), Microsoft (NASDAQ:MSFT) and AT&T (NYSE:T), while adding some needed exposure to a key part of the economy.
– Dan Burrows, InvestorPlace Feature Writer