Comcast Corporation (NASDAQ:CMCSA) for the assets of Twenty-First Century Fox, Inc. (NASDAQ:FOXA). Comcast stock has been volatile in recent weeks as the story evolves.

Outside of the war for Fox, however, there’s plenty of other factors that are influencing Comcast stock. For one, the stock looks really cheap in the event it doesn’t buy Disney.

On the other hand, the situation gets much murkier if the deal for Fox does go through. What happens to Comcast in either scenario, and on the balance, does the reward justify the risk? Let’s take a look.

Comcast Stock Cons

Potentially Overpaying For Fox: FOXA stock is now trading at five-year highs, and has doubled off of its 52-week low set in November. In fact, the stock is up from near five-year lows to new highs in large part due to this bidding war.

That puts Comcast in a dangerous position. It now faces the risk of a so-called winner’s curse, where a bidder pays too much at an auction and ends up regretting their decision.

We saw this play out recently with AT&T Inc. (NYSE:T). After the court cleared AT&T’s bid for Time Warner Inc., T stock has traded badly, falling almost 10% in a week.

That’s not surprising, since the consensus was that AT&T overpaid and they didn’t have an aggressive rival like Disney fighting them. By the time Comcast or Disney makes the winning bid, they could end up overpaying drastically.

Huge Debtload Post-Fox: If Comcast manages to close the Fox deal, it’s going to end up with a strained balance sheet. For comparison’s sake, consider AT&T.

To finish its Time Warner deal, AT&T is likely to become the country’s most indebted company (not counting banks and other financial institutions).

Comcast would similarly be on their heels. They currently have about $65 billion in debt. This would explode to around $140 billion with the purchase of Fox (if they don’t have to raise their bid substantially).

top of that, Comcast will owe around $30 billion more to complete its deal for the UK’s Sky business though it is in a bidding war there as well. Regardless, if it closes both deals, it could end up with $170 billion in total debt.

That would make it the US’ second most-indebted company, trailing only AT&T. The ratings agencies are already showing concern about Comcast’s spending spree.

If It Doesn’t Buy Fox, It Will Have To Make Another Move: While there are serious risks to the bidding war for Fox, Comcast has another issue. It can’t just stay with the status quo.

The court’s decision in the AT&T case to allow the merger to go through with no meaningful limitations will set off a feeding frenzy in the media space. A cable operator by itself won’t have the vertical integration needed to survive.

Going forward, you’ll see more behemoth companies like AT&T Time Warner as they themselves face the growing threat from big tech with their digital media platforms such as Facebook, Inc. (NASDAQ:FB) and Alphabet, Inc. (NASDAQ:GOOGL).

If Comcast doesn’t get Fox, expect them to bid for something else. And, as the pool of viable takeover candidates shrinks, prices may rise further.

Comcast Stock Pros

Strong Dividend Play: In the event that Disney wins the bidding war, CMCSA stock is a solid dividend option. The company has raised their dividend for 10 consecutive years, and generally at a double-digit clip.

A starting dividend yield of 2.3%, which grows fairly quickly, is attractive indeed.

That said, if Comcast does pull off the big Fox purchase, dividend growth is likely to be far slower. The company would have to focus on paying down debt before doing much else in the way of shareholder returns.

But if Disney wins the auction, Comcast should reward yield-focused shareholders nicely in coming years.

Cheap Stock: Comcast has dropped from a high of 44 earlier this year to just 33 now. That’s a 25% decline. While general stock market concerns explain some of this, most of it is likely due to uncertainty about the M&A activity for Sky and Fox.

However, with that drop comes an attractive price. Comcast is now selling at 15x trailing and 12x forward earnings.

Those are some pretty nice figures. All else held equal, 16x forward earnings seems fair for this sort of business, which would put the stock around $40.

The math here changes pretty dramatically if the Fox deal goes through, but the combined company should still be cheap on an earnings basis as well.

Fox Acquisition Could Be Transformative: There are plenty of reasons to be nervous about the Fox purchase. But the upside, if management can execute, would be tremendous.

Fox would get three major benefits from the deal. The first is that its content costs would go down a lot.

Cord-cutting is an obvious and persistent headwind for Comcast. Since it will be hard to grow (or even maintain) revenues in the core business, making moves on the cost side could help.

Owning a lot of the content and channels would be a strong step in that direction.

Additionally, Comcast would get a controlling stake in Hulu by buying Fox, giving it a credible streaming competitor.

Finally, since the deal is to be funded with all debt, while adding substantial risk to the company, it’d also boost earnings pretty dramatically since it avoids dilution.

Comcast Stock Verdict

Comcast stock currently comes with extreme uncertainty, and is priced accordingly. It’s hard to make any particularly concrete predictions as long as the bids for Sky and Fox remain outstanding.

Comcast looks like a cheap stock with serious potential for a dividend growth investor today. If Disney wins Fox, it’s not hard at all to see Comcast stock moving back up to 40 as investors relax.

On the other hand, if Comcast wins the bid for Fox, it’s a whole new ballgame. Adding Fox would give Comcast tremendous market power, particularly in becoming a serious player in streaming.

On the other hand, the debt load could drown the economy if a recession hit or expected synergies failed to develop. Buyers of Comcast stock looks like a steal, but the Fox deal could change everything here could win big, but it’s a high-risk play right now.

At the time of this writing, the author owned FB stock, and had no positions in any of the other aforementioned securities.