It is time to invest in the cable sector particularly Comcast and Charter Communications stocks, according to analysts at MofettNathanson.

In a note to investors, MoffettNathanson analyst Craig Moffett and his colleagues noted that the cable sector had been resilient despite concerns regarding the acceleration of cord-cutting and regulatory risks on broadband pricing.The analysts upgraded their rating on the cable sector to Overweight from Neutral

Cable sector cord-cutting problem

Over the past several months, Wall Street analysts noted that cord-cutting was a major problem for the cable sector. During the second quarter this year, cable and satellite TV providers reported a decline of subscribers in the United States. In fact, the cable sector lost more than 500 thousand subscribers in the second quarter.

Many consumers ditched cable providers to save money and opted to subscribe to Netflix, Hulu, and other online video service providers. BTIG Research analyst Rich Greenfield previously stated that is a “clear and convincing evidence” that the number of consumers cutting the cord is increasing.

Although analysts see cord cutting as a major problem, it appears that the management of cable and satellite TV companies doesn’t consider over-the-top (OTT) video providers significant threat. For example, Cablevision Systems CEO James Dolan recently commented that OTT video providers still have limited programming and are not yet ready to attract mainstream cable consumers. He estimated that it would take 10 years before 30% of subscribes move away from cable.

A previous report from Nielsen indicated that cable operators have better-staying power than subscription-video-on-demand (SVOD) providers. Glenn Enoch, Nielsen senior vice president of Audience Insights said, “Not every SVOD home is abandoning cable. Of all the things we looked at — cable, broadband, SVOD — the ones with cable subscriptions are much less likely to drop it over time.”

It is obvious that the issue about “cord-cutting” in the cable sector is no longer in the center of the debate, which is also noted by analysts at MoffettNathanson in their recent note to investors.

Comcast and Charter are materially cheaper than the broader market

Moffett and his fellow analysts are favor Comcast and Charter Communications among the companies in the cable sector. They emphasized that both companies recorded growth over the past six months and materially cheaper than the broader market.

Comcast and Charted Communications increased earnings, revenues, and subscribers while the broader market did not.

Comcast launched Stream, a package for internet-only customers in response to the cord-cutting trend. The company also recently invested $200 million in Vox Media and another $200 million in BuzzFeed to diversify its advertising business and capture a market share in the growing social news industry.

Moffett and his fellow analysts upgraded their rating on Comcast to Buy and maintained their price target of $67 per share. The stock price of Comcast increased 0.50% to $60 per share at the time of this writing, around 3:29 PM in New York.

The analyst also recommended a Buy rating for Charter Communications and raised their price target from $195 to $210 per share. The stock price of Charter Communications is slightly down to $188.86 per share.