CBS Corp (CBS)

esxokm (95.90) Submitted: 8/28/06 7:27 AM : Start Price: $27.23 CBS Score: 29.09

I agree that CBS is extremely shareholder friendly. The company has been bending over backward to supply shareholders with a nice dividend payout. And I do love dividends.

But...

I have to look at CBS in the context of its previous partner in crime -- namely, Viacom. When old-Viacom decided to split itself in two parts -- resulting in the new Viacom and CBS -- it did so with a specific plan: target CBS for income investors (i.e., look to return cash flow to shareholders in the form of dividends) and target Viacom for growth investors looking for cash flow to be reinvested in high-potential acquisitions.

Thing is, I like Viacom's cable properties over the network business. The CBS network, in my opinion, might be struggling in the near future (all networks carry this risk these days, because they are seeing rampant viewer erosion). If that is the case, then I'd rather be with Viacom and its MTV Networks. Also, I think Paramount Pictures, as well as all movie studios, will be looking to revamp their operations and make the movie business a higher-margin operation (although don't hold your breath on this latter count).

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