Stock Analysis: Telephone And Data Systems

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Telephone and Data Systems Inc. (TDS) is a diversified telecommunications operator that provides mobile, telephone, and broadband services. The company's segments include US Cellular and TDS Telecom. It generates maximum revenue from the US cellular segment.

Telephone and Data Systems, Inc. was incorporated in 1968 and is headquartered in Chicago, Illinois.

Three key data points gauge Telephone and Data Systems Inc, or any dividend-paying firm.

The key three are:

(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

Over the past year, TDS’s share price dropped 47% from $15.37 to $8.14 as of Thursday’s market close.

If TDS stock trades in the range of $6.00 to $15.00 this next year, its recent $8.14 share price might rise to $10.00 by next year. Of course, Deluxe’s price could drop about the same $1.86 amount, or more.

My upside estimate of $1.86, however, is $4.67 below the median of 1-year target prices set by 3 analysts tracking the stock for brokers.

TDS Dividend

Telephone and Data Systems Inc’s most recent $0.185 quarterly dividend, paid June 30th to shareholders of record June 14th, equates to $0.74 annually and throws a yield of 9.09% as of Wednesday’s closing price.

TDS Returns

Adding the $0.74 anticipated annual dividend to TDS’s estimated $1.86 price upside reveals a $2.60 potential gross gain per share for the coming year.

At Thursday’s $8.14 closing price, a little over $1000 would buy 123 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $0.08 per share.

Subtracting that maybe $0.08 brokerage cost from my estimated $2.60 gross gain per share makes a net gain amounting to $2.52 X 123 shares = $309.96 for about a 31% net gain.

This may be the time to pounce on Telephone and Data Systems Inc. But beware, while its dividend is high its price continues falling, and is lately priced at $60.37 below the stock’s all-time high of $67.77 posted back on August 2007.

The foregoing article is based on past history of Telephone and Data Systems Inc. The only accurate measure of future performance is from active investment in the company.

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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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