Contrasting United States Cellular Corporation (USM) and TIM Participacoes (TSU)
United States Cellular Corporation (NYSE: USM) and TIM Participacoes (NYSE:TSU) are both mid-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.
Insider & Institutional Ownership
14.8% of United States Cellular Corporation shares are held by institutional investors. Comparatively, 16.5% of TIM Participacoes shares are held by institutional investors. 1.6% of United States Cellular Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This table compares United States Cellular Corporation and TIM Participacoes’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United States Cellular Corporation||1.26%||1.12%||0.58%|
TIM Participacoes pays an annual dividend of $0.07 per share and has a dividend yield of 0.4%. United States Cellular Corporation does not pay a dividend. TIM Participacoes pays out 12.3% of its earnings in the form of a dividend. TIM Participacoes has increased its dividend for 4 consecutive years.
Valuation and Earnings
This table compares United States Cellular Corporation and TIM Participacoes’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|United States Cellular Corporation||$3.88 billion||0.82||$625.00 million||$0.58||64.47|
|TIM Participacoes||$4.97 billion||1.82||$1.17 billion||$0.57||32.86|
TIM Participacoes has higher revenue and earnings than United States Cellular Corporation. TIM Participacoes is trading at a lower price-to-earnings ratio than United States Cellular Corporation, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and recommmendations for United States Cellular Corporation and TIM Participacoes, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United States Cellular Corporation||1||2||0||0||1.67|
United States Cellular Corporation presently has a consensus price target of $35.50, suggesting a potential downside of 5.05%. TIM Participacoes has a consensus price target of $18.63, suggesting a potential downside of 0.56%. Given TIM Participacoes’ stronger consensus rating and higher probable upside, analysts clearly believe TIM Participacoes is more favorable than United States Cellular Corporation.
Volatility and Risk
United States Cellular Corporation has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500. Comparatively, TIM Participacoes has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500.
TIM Participacoes beats United States Cellular Corporation on 13 of the 17 factors compared between the two stocks.
United States Cellular Corporation Company Profile
United States Cellular Corporation (U.S. Cellular) is a provider of wireless telecommunication services. The Company’s wireless operating markets are in the United States. U.S. Cellular provides service to postpaid and prepaid customers from a range of demographic segments. The Company focuses on retail consumers, government and small-to-mid-size business customers in industries, such as construction, retail, professional services and real estate. The Company offers a range of wireless devices, such as handsets, modems, mobile hotspots, home phones and tablets for use by its customers. U.S. Cellular offers wireless devices that are compatible with fourth generation long term evolution (4G LTE) and third generation (3G) networks. U.S. Cellular offers a range of accessories, such as carrying cases, hands-free devices, batteries, battery chargers, and memory cards to related consumer electronics, such as headphones, speakers and Bluetooth keyboards.
TIM Participacoes Company Profile
TIM Participacoes S.A. (TIM) is a provider of mobile telecommunication services in Brazil. The Company, through its subsidiaries in various telecommunications markets, operates mobile, fixed and long distance telephony, data transmission and ultra-broadband services. Its direct subsidiaries include TIM Celular S.A., which provides landline telephone services (commuted fixed telephonic service (STFC))-domestic long distance and international long distance voice services, personal mobile service (SMP) and multimedia communication service (multimedia service of communication (SCM)) in all Brazilian states and in the Federal District, and Intelig Telecomunicacoes Ltda., which provides STFC-local voices services and SCM services in all Brazilian states and in the Federal District. Its consumer plans include prepaid plans, post-paid plans and controle plans. It offers value-added services, including short message services or text messaging, multimedia messaging services and push-mail.
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