Financial Analysis: Telephone and Data Systems (TDS) & Intelsat (I)
Telephone and Data Systems (NYSE: TDS) and Intelsat (NYSE:I) are both utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, analyst recommendations, valuation, institutional ownership and profitabiliy.
This is a breakdown of recent recommendations and price targets for Telephone and Data Systems and Intelsat, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Telephone and Data Systems||0||2||0||0||2.00|
Telephone and Data Systems presently has a consensus target price of $38.00, indicating a potential upside of 31.90%. Intelsat has a consensus target price of $4.63, indicating a potential upside of 28.12%. Given Telephone and Data Systems’ higher probable upside, equities analysts plainly believe Telephone and Data Systems is more favorable than Intelsat.
Valuation and Earnings
This table compares Telephone and Data Systems and Intelsat’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Telephone and Data Systems||$5.09 billion||0.62||$953.00 million||$0.48||60.02|
|Intelsat||$2.17 billion||0.20||$1.61 billion||$6.72||0.54|
Intelsat has higher revenue, but lower earnings than Telephone and Data Systems. Intelsat is trading at a lower price-to-earnings ratio than Telephone and Data Systems, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Telephone and Data Systems has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, Intelsat has a beta of 2.11, suggesting that its stock price is 111% more volatile than the S&P 500.
Insider & Institutional Ownership
80.7% of Telephone and Data Systems shares are held by institutional investors. Comparatively, 38.6% of Intelsat shares are held by institutional investors. 17.3% of Telephone and Data Systems shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Telephone and Data Systems pays an annual dividend of $0.62 per share and has a dividend yield of 2.2%. Intelsat does not pay a dividend. Telephone and Data Systems pays out 129.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telephone and Data Systems has increased its dividend for 42 consecutive years.
This table compares Telephone and Data Systems and Intelsat’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Telephone and Data Systems||1.43%||1.41%||0.71%|
Telephone and Data Systems beats Intelsat on 9 of the 16 factors compared between the two stocks.
Telephone and Data Systems Company Profile
Telephone and Data Systems, Inc. is a diversified telecommunications company. The Company is engaged in conducting its Wireless operations through its subsidiary, United States Cellular Corporation (U.S. Cellular), as well as providing its wireline services, cable services, and hosted and managed services (HMS), through its subsidiary, TDS Telecommunications Corporation (TDS Telecom). It operates through four business segments: U.S. Cellular, Wireline, Cable, and Hosted and Managed Services. U.S. Cellular provides service to postpaid and prepaid customers. Wireline operations provide retail telecommunications services to both residential and commercial customers. Wireline offers services, including broadband, video, voice and network access services. Cable offers broadband, video and voice services under TDS and BendBroadband brand names. It provides a range of information technology (IT) services, including colocation, and cloud and hosting solutions through its HMS business.
Intelsat Company Profile
Intelsat S.A. operates in satellite services business. The Company provides satellite services to its communications customers around the world. It provides communications services to media companies, fixed and wireless telecommunications operators, data networking service providers for enterprise and mobile applications in the air and on the seas, multinational corporations and Internet service providers (ISPs). The Company is also a provider of commercial satellite communication services to the United States Government and other select military organizations and their contractors. The Company focuses on business-to-business services, indirectly enable enterprise, government and consumer applications through its customers. The Company has operations in North America, Europe, Latin America and Caribbean, Africa and Middle East, and Asia Pacific.
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