With or without Comcast Corp. (NASDAQ: CMCSA), is Time Warner Cable (NYSE: TWC) a sound buy?

Time Warner Cable (NYSE: TWC)’s last reported quarter saw an 11.8% year over year adjusted earnings per share increase. Although the statistic is a little short of their expectations, the company hopes of its increase in the subsequent quarters. Time Warner Cable (NYSE: TWC) on its own is a good investment option with its 11.415 million residential high-speed data subscribers behind it, bringing in Q2 revenues to over $1.6 billion, up 12% year over year.

Further growth of the company’s subscriber base has already been built with the addition of some 340,000 new Internet customers for this year through Q2. Moreover, the roll-out of Time Warner (NYSE: TWC)’s Cable Maxx, a broadband connection with data speeds of up to 300 megabits per second, is expected to bring in an estimated six million more subscribers in the coming months. In addition, the cable giant has been preparing to release Cable Maxx to seven more markets in 2014’s second half and into 2015.
Higher average revenue per user (ARPU) drives revenues and margins further up, so higher earnings are expected as well with the presumed increase of subscribers in the subsequent quarters. While Q2’s monthly ARPU in residential high-speed data already saw an increase of 9.7% to $46.92, it is expected to increase further in Q3.

The company’s stature in the coming quarters is expected to be affected by the continuous advancement and growth in the industry. Looking into current values, Time Warner Cable (NYSE: TWC) has a P/E (Price-Earnings Ratio) of 19 which is far below the industry average P/E of 31.

In contrast with an industry competitor such as Dish Network (NASDAQ: DISH), Time Warner Cable (NYSE: TWC) seems to be a better option, trading at about 19 times its earnings like Comcast Corp. (NASDAQ: CMCSA). Dish Network (NASDAQ: DISH), on the other hand, trades above 29 times earnings. Time Warner Cable (NYSE: TWC)’s expected P/E come 2015’s year-end is only 17 times while that of Dish Network (NASDAQ: DISH)’s is predicted to be over 33 times. Time Warner Cable (NYSE: TWC) also has the upper hand against Dish Network (NASDAQ: DISH) with respect to profit margins, debt to equity, and quarterly earnings growth.

A definitive merger to combine under Comcast Corp. (NASDAQ: CMCSA)’s name has been agreed upon by Time Warner Cable (NYSE: TWC) and the former. All of Time Warner Cable (NYSE: TWC)’s shares are to be converted into Comcast Corp. (NASDAQ: CMCSA)’s at a rate of 2.875, with each Time Warner Cable (NYSE: TWC) stock priced at about $153 per share at current prices. This already sees a 7% increase from their stock price of around $147 currently.

This collaboration is approximated to generate $1.5 billion in efficiencies and cost savings according to Comcast (NASDAQ: CMCSA) CEO Brian Roberts.
The merger has been voted to move forward unanimously on October 9.
In the event that the merger does get completed, investors are most likely to stick around long-term. Nevertheless, Time Warner Cable (NYSE: TWC) on its own currently is a good play.