Daily Stock Analysis: Telephone And Data Systems, Inc.

Telephone and Data Systems Inc, known by the ticker symbol TDS, is a mid cap telecom services firm in the Communication Services business sector. This is my first report on TDS for my Viital stock portfolio and it was selected as the twenty-first pick for my Vista portfolio.

Telephone and Data Systems Inc is a diversified telecommunications operator that provides mobile, telephone, and broadband services to more than 7 million customers. 

gray metal tower with accessories

Image Source: Unsplash

The firm's mobile operations are conducted by its 81%-owned subsidiary, U.S. Cellular, which serves nearly 5 million wireless customers. The firm's wireline operations are conducted by its wholly-owned subsidiary, TDS Telecom, which services over 1 million phone and Internet access lines in predominantly rural and suburban areas.

It sells its products through retail sales, direct sales, third-party retailers, and independent agents, as well as through e-commerce and telesales. 

As of December 31, 2020, the company offered its services to 5 million wireless, and 1.2 million wireline and cable-connected customers. 

'The company was incorporated in 1968 and is headquartered in Chicago, Illinois.

Three key data points gauge dividend equities or funds like Telephone and Data Systems Inc (TDS):

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money. 

TDS Price

Telephone and Data Systems' price per share was $19.43 as of yesterday's market close. One year ago its price was $17.74. So, BCE's share price increased by just over 9.5% in the past year.

If TDS' stock trades in the range of $15 to $24.00 this next year, its recent $19.43 price will likely rise by $5.57 to reach $25.00 by October 20, 2022. My estimate is based on the trajectory traced over the past thirty-five years of price data. It is $5.62 lower than the median of one-year target estimates by 4 analysts who track the stock for brokers.  

TDS Dividends

TDS' most recent Q dividend of  $0.175 was paid out on September 30, to shareholders. That equates to an annual payout of $0.70  and yields 3.60% based on yesterday's $19.43 closing price. TDS has paid regular variable quarterly dividends since December 1974. That's 47 years. 

TDS Returns

Adding the $0.70 annual estimated TDS forward-looking dividend to my $5.57 price upside estimate shows a $6.27 potential gross gain, per share, to be reduced by any costs to trade TDS shares.  

At yesterday's $19.43 price per share, a little under $1000 would buy 51 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at sale and might cost us about $0.20 per share.

Subtract that maybe $0.20  brokerage cost from my estimated $6.27 gross gain per share results in a net gain of $6.07 X 51 shares = $309.57 for a 30.96% net gain on a $990.93 investment.

So it is that Telephone and Data Systems Inc (TDS) shows a possible 30.96% net gain including a 3.6% forward estimated dividend yield. 

Over the next year at this time, a $1000 investment in Telephone and Data Systems Inc (TDS) could generate $36.00 in cash dividends alone. And a single share bought at yesterday's closing price was $19.43! Thus, TDS' share price is $16.57 less than the dividend income from $1000.00 invested. So, according to my dogcatcher ideal, now is the time to pick up TDS shares. The estimated next year's dividend from $1k invested is nearly $17.00 greater than the single share price. Consider yourself alerted. Its a sign! 

All of the estimates above are speculation based on the past history of Telephone and Data Systems Inc (TDS). Only time and money invested in this stock will determine its market value.

Disclaimer:  This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

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