Telephone and Data Systems (NYSE: TDS) is one of 36 public companies in the “Wireless Telecommunications Services” industry, but how does it compare to its peers? We will compare Telephone and Data Systems to related companies based on the strength of its valuation, profitability, earnings, risk, institutional ownership, analyst recommendations and dividends.

Profitability

This table compares Telephone and Data Systems and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telephone and Data Systems 1.09% 1.15% 0.58%
Telephone and Data Systems Competitors -999.64% 3.16% -6.42%

Dividends

Telephone and Data Systems pays an annual dividend of $0.62 per share and has a dividend yield of 2.3%. 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. As a group, “Wireless Telecommunications Services” companies pay a dividend yield of 3.1% and pay out 62.1% of their earnings in the form of a dividend. Telephone and Data Systems has raised its dividend for 42 consecutive years. Telephone and Data Systems lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Institutional & Insider Ownership

82.5% of Telephone and Data Systems shares are owned by institutional investors. Comparatively, 40.4% of shares of all “Wireless Telecommunications Services” companies are owned by institutional investors. 17.3% of Telephone and Data Systems shares are owned by insiders. Comparatively, 12.5% of shares of all “Wireless Telecommunications Services” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

Telephone and Data Systems has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Telephone and Data Systems’ peers have a beta of 0.78, indicating that their average share price is 22% less volatile than the S&P 500.

Valuation & Earnings

This table compares Telephone and Data Systems and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Telephone and Data Systems $5.04 billion $934.00 million 56.00
Telephone and Data Systems Competitors $28.13 billion $8.22 billion -5.52

Telephone and Data Systems’ peers have higher revenue and earnings than Telephone and Data Systems. Telephone and Data Systems is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of current recommendations for Telephone and Data Systems and its peers, as reported by MarketBeat.

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 Competitors 572 1702 1789 69 2.33

Telephone and Data Systems presently has a consensus price target of $38.00, suggesting a potential upside of 41.37%. As a group, “Wireless Telecommunications Services” companies have a potential upside of 22.01%. Given Telephone and Data Systems’ higher possible upside, research analysts plainly believe Telephone and Data Systems is more favorable than its peers.

Summary

Telephone and Data Systems peers beat Telephone and Data Systems on 8 of the 15 factors compared.

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.

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