Is Anything On? Why Value Seekers Are Tuning Into CBS

Watching television is very retro these days. Any respectable young person is watching Netflix (NFLX), or at least Tweeting while watching The Voice.

But the networks seem fine with their distraction because young people don’t have as much disposable income. Baby boomers wrung their hands when their retirement accounts contracted in the tech crash of 2000, but these days they’re in pretty decent financial shape compared to many of their children, who either can’t find jobs or are saddled with underwater mortgages. That means they’re of interest to advertisers, and that makes CBS (CBS) hip, in a boomer sort of way.

As Bloomberg Businessweek recently wrote, CBS has the oldest viewers of the big four networks. (And that plays well in CBS’s executive suite, where 89-year-old Sumner Redstone is in charge.) The average CBS viewer is 57 years old, versus 52 at ABC, 50 at NBC and 45 at Fox. Those older eyes bring advertising dollars to CBS, as older viewers are more likely to buy the luxury cars, financial services and pharmaceuticals being advertised.

But debt is why Ariel Capital’s John Rogers recently cited CBS as one of three beaten-down stocks worth a look.

CBS Debt to Equity Ratio Chart

CBS Debt to Equity Ratio data by YCharts

During the downturn, CBS has lowered its debt ratios substantially. In 2009, CBS had $7 billion in debt and only a $2 billion market value. Now it has $6 billion in debt but a $23 billion market value.

CBS Market Cap Chart

CBS Market Cap data by YCharts

This doesn't explain why CBS' Two and a Half Men is so popular. Some things are beyond reason.

From the editors of YCharts.YCharts Pro Investor Service includes professional stock charts, stock ratings and portfolio strategies.



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