Overall TDS gets a fundamental rating of 3 out of 10. We evaluated TDS against 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.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year TDS has reported negative net income.
TDS had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: TDS reported negative net income in multiple years.
Each year in the past 5 years TDS had a positive operating cash flow.

1.2 Ratios

TDS has a worse Return On Assets (-1.47%) than 77.27% of its industry peers.
TDS's Return On Equity of -2.80% is on the low side compared to the rest of the industry. TDS is outperformed by 72.73% of its industry peers.
Looking at the Return On Invested Capital, with a value of 0.43%, TDS is doing worse than 77.27% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital 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

The Operating Margin of TDS (1.10%) is worse than 77.27% of its industry peers.
TDS's Operating Margin has declined in the last couple of years.
With a decent Gross Margin value of 57.76%, TDS is doing good in the industry, outperforming 72.73% of the companies in the same industry.
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%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TDS is destroying value.
TDS has more shares outstanding than it did 1 year ago.
TDS has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, TDS has a worse debt to assets ratio.

2.2 Solvency

TDS has an Altman-Z score of 1.53. This is a bad value and indicates that TDS is not financially healthy and even has some risk of bankruptcy.
With a decent Altman-Z score value of 1.53, TDS is doing good in the industry, outperforming 63.64% of the companies in the same industry.
TDS has a debt to FCF ratio of 2.84. This is a good value and a sign of high solvency as TDS would need 2.84 years to pay back of 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.
A Debt/Equity ratio of 0.18 indicates that TDS is not too dependend on debt financing.
TDS's Debt to Equity ratio of 0.18 is amongst the best of the industry. TDS outperforms 86.36% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.18
Debt/FCF	2.84
Altman-Z	1.53

ROIC/WACC0.05

WACC8.32%

2.3 Liquidity

A Current Ratio of 1.89 indicates that TDS should not have too much problems paying 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.
TDS has a Quick Ratio of 1.88. This is a normal value and indicates that TDS is financially healthy and should not expect problems in meeting 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

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 80.46% over the past year.
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

Based on estimates for the next years, TDS will show a very strong growth in Earnings Per Share. The EPS will grow by 43.46% on average per year.
Based on estimates for the next years, TDS will show a very negative growth in Revenue. The Revenue will decrease by -35.78% on average per year.

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.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings Ratio is negative for TDS. In the last year negative earnings were reported.
A Price/Forward Earnings ratio of 92.57 indicates a quite expensive valuation of TDS.
81.82% of the companies in the same industry are cheaper than TDS, based on the Price/Forward Earnings ratio.
TDS is valuated expensively when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	N/A
Fwd PE	92.57

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as TDS.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TDS indicates a slightly more expensive valuation: TDS is more expensive than 68.18% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	17.9
EV/EBITDA	9.39

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%

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5. Dividend

5.1 Amount

TDS has a yearly dividend return of 0.36%, which is pretty low.
Compared to an average industry Dividend Yield of 6.47, TDS is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 1.83, TDS's dividend is way lower than the S&P500 average.

		Industry Rank	Sector Rank
Dividend Yield	0.36%

5.2 History

On average, the dividend of TDS grows each year by 6.94%, which is quite nice.
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%

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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 3 / 10 and the dividend payout ratio is -69.41%.