Viacom, Inc. Class BVIAB

Morningstar Rating

Stock Research and Analysis

by Michael Corty, CFA

Viacom owns a valuable portfolio of cable networks that are entrenched in basic pay-television subscriptions. We believe the company's best network is Nickelodeon, which not only draws the largest audience for kids (ages 2-11), but also has been the Read more

Bulls Say

Viacom owns a number of well-known cable networks, including MTV, Nickelodeon, and BET, which are very popular with traditionally hard-to-reach audiences--teens, children, and African Americans.

Viacom's Paramount Pictures holds the rights to thousands of films, including some of the most popular ever made. As media formats evolve, the firm can make money from these films in different formats.

About one-third of cable network revenue comes from affiliate fees, which provides some earnings stability for Viacom. Read more

Bears Say

The convergence of media and technology is calling many media business models into question. If Viacom can't adapt to the changing environment, its shareholders could suffer.

All too often, media executives have chased deals that made little economic sense. If Viacom uses its balance sheet for value-destroying deals, shareholder returns will be poor.

Developing enticing programming can be hit-or-miss, especially content aimed at MTV's young demographic, whose preferences can be fickle. Read more

Management

Viacom's stewardship of shareholder capital is standard. Chairman Sumner Redstone controls Viacom through ownership of Class A shares--representing a majority of the outstanding voting shares--held by his family-owned National Amusements. (The more-liquid Read more

Profile

Viacom is a global media company with several leading cable network properties, including Nickelodeon, MTV, BET, Comedy Central, VH1, Country Music Television, and Spike Read more