TELEPHONE AND DATA SYSTEMS (TDS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TDS - US8794338298 - Common Stock
43.63 USD
+0.03 (+0.07%)
43.63 USD
0 (0%)
We assign a fundamental rating of 3 out of 10 to TDS. TDS was compared to 22 industry peers in the Wireless Telecommunication Services industry. While TDS seems to be doing ok healthwise, there are quite some concerns on its profitability. TDS is valued expensive and it does not seem to be growing. Finally TDS also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- In the past year TDS has reported negative net income.
- In the past year TDS had a positive cash flow from operations.
- The reported net income has been mixed in the past 5 years: TDS reported negative net income in multiple years.
- TDS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- TDS has a Return On Assets of -1.47%. This is in the lower half of the industry: TDS underperforms 77.27% of its industry peers.
- The Return On Equity of TDS (-2.80%) is worse than 72.73% of its industry peers.
- With a Return On Invested Capital value of 0.43%, TDS is not doing good in the industry: 77.27% of the companies in the same industry are doing better.
- The Average Return On Invested Capital over the past 3 years for TDS is significantly below the industry average of 6.55%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.47% | ||
| ROE | -2.8% | ||
| ROIC | 0.43% |
ROA(3y)-1.61%
ROA(5y)-0.43%
ROE(3y)-4.32%
ROE(5y)-1.26%
ROIC(3y)1%
ROIC(5y)1.36%
1.3 Margins
- With a Operating Margin value of 1.10%, TDS is not doing good in the industry: 77.27% of the companies in the same industry are doing better.
- In the last couple of years the Operating Margin of TDS has declined.
- TDS has a Gross Margin of 57.76%. This is in the better half of the industry: TDS outperforms 72.73% of its industry peers.
- In the last couple of years the Gross Margin of TDS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.1% | ||
| PM (TTM) | N/A | ||
| GM | 57.76% |
OM growth 3Y-14.66%
OM growth 5Y-1.97%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.06%
GM growth 5Y0.77%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TDS is destroying value.
- Compared to 1 year ago, TDS has more shares outstanding
- Compared to 5 years ago, TDS has less shares outstanding
- TDS has a worse debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 1.50, we must say that TDS is in the distress zone and has some risk of bankruptcy.
- TDS has a better Altman-Z score (1.50) than 63.64% of its industry peers.
- The Debt to FCF ratio of TDS is 2.84, which is a good value as it means it would take TDS, 2.84 years of fcf income to pay off all of its debts.
- With a decent Debt to FCF ratio value of 2.84, TDS is doing good in the industry, outperforming 72.73% of the companies in the same industry.
- TDS has a Debt/Equity ratio of 0.18. This is a healthy value indicating a solid balance between debt and equity.
- With an excellent Debt to Equity ratio value of 0.18, TDS belongs to the best of the industry, outperforming 86.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.18 | ||
| Debt/FCF | 2.84 | ||
| Altman-Z | 1.5 |
ROIC/WACC0.05
WACC7.95%
2.3 Liquidity
- TDS has a Current Ratio of 1.89. This is a normal value and indicates that TDS is financially healthy and should not expect problems in meeting its short term obligations.
- TDS has a Current ratio of 1.89. This is amongst the best in the industry. TDS outperforms 100.00% of its industry peers.
- A Quick Ratio of 1.88 indicates that TDS should not have too much problems paying its short term obligations.
- The Quick ratio of TDS (1.88) is better than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.89 | ||
| Quick Ratio | 1.88 |
3. Growth
3.1 Past
- TDS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 80.46%, which is quite impressive.
- Looking at the last year, TDS shows a very negative growth in Revenue. The Revenue has decreased by -22.79% in the last year.
- TDS shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.83% yearly.
EPS 1Y (TTM)80.46%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%109.59%
Revenue 1Y (TTM)-22.79%
Revenue growth 3Y-2.34%
Revenue growth 5Y-0.83%
Sales Q2Q%-49.54%
3.2 Future
- The Earnings Per Share is expected to grow by 43.46% on average over the next years. This is a very strong growth
- The Revenue is expected to decrease by -35.78% on average over the next years. This is quite bad
EPS Next Y-4.11%
EPS Next 2Y60.21%
EPS Next 3Y43.46%
EPS Next 5YN/A
Revenue Next Year-40.27%
Revenue Next 2Y-49.29%
Revenue Next 3Y-35.78%
Revenue Next 5YN/A
3.3 Evolution
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- TDS reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
- The Price/Forward Earnings ratio is 89.50, which means the current valuation is very expensive for TDS.
- Based on the Price/Forward Earnings ratio, TDS is valued more expensive than 81.82% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. TDS is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 89.5 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as TDS.
- Based on the Price/Free Cash Flow ratio, TDS is valued a bit more expensive than the industry average as 63.64% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.3 | ||
| EV/EBITDA | 9.07 |
4.3 Compensation for Growth
- TDS's earnings are expected to grow with 43.46% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y60.21%
EPS Next 3Y43.46%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 7.43%, TDS is a good candidate for dividend investing.
- TDS's Dividend Yield is rather good when compared to the industry average which is at 3.98. TDS pays more dividend than 90.91% of the companies in the same industry.
- TDS's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.43% |
5.2 History
- The dividend of TDS is nicely growing with an annual growth rate of 6.94%!
- TDS has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)6.94%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- TDS has negative earnings and hence a negative payout ratio. The dividend may be in danger.
- TDS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-69.41%
EPS Next 2Y60.21%
EPS Next 3Y43.46%
TELEPHONE AND DATA SYSTEMS / TDS FAQ
What is the ChartMill fundamental rating of TELEPHONE AND DATA SYSTEMS (TDS) stock?
ChartMill assigns a fundamental rating of 3 / 10 to TDS.
What is the valuation status for TDS stock?
ChartMill assigns a valuation rating of 1 / 10 to TELEPHONE AND DATA SYSTEMS (TDS). This can be considered as Overvalued.
How profitable is TELEPHONE AND DATA SYSTEMS (TDS) stock?
TELEPHONE AND DATA SYSTEMS (TDS) has a profitability rating of 2 / 10.
Can you provide the expected EPS growth for TDS stock?
The Earnings per Share (EPS) of TELEPHONE AND DATA SYSTEMS (TDS) is expected to decline by -4.11% in the next year.
How sustainable is the dividend of TELEPHONE AND DATA SYSTEMS (TDS) stock?
The dividend rating of TELEPHONE AND DATA SYSTEMS (TDS) is 7 / 10 and the dividend payout ratio is -69.41%.