Does Telephone & Data Systems (TDS) have what it takes to be a top stock pick for momentum investors? Let's find out.
Telephone and Data Systems preferred stock has seen a 70% total return in about a year, outperforming the S&P 500 by an impressive margin. High interest rates and debt impacted the stock in recent years, but a strategic decision to sell assets has rendered the dividend safer. Risks remain as the company navigates hurdles to close the deal and may struggle to maintain the preferred dividend in the long run.
Telephone and Data Systems Preferred Shares offer a better combination of income and value compared to ordinary shares. TDS's recent financial performance shows mixed results, with strong competition leading to revenue pressure in the wireless segment. TDS's preferred shares, specifically the U series, with a 6.625% dividend yield and a call date for March 2026, seem to be a better option for investors.
The divestiture aligns with Telephone and Data Systems' (TDS) capital allocation strategy, aiming to boost competitiveness through targeted investments.
U.S. Cellular Corp. USM, -0.81%, and its parent Telephone and Data Systems Inc. TDS, -0.37%, announced an agreement Tuesday in which U.S. Cellular's wireless operations and certain spectrum assets will be sold to T-Mobile U.S. Inc. TMUS, +0.62% in a deal valued at $4.4 billion, including about $2 billion worth of debt. U.S. Cellular and TDS shares have been halted for news, while T-Mobile's stock slipped 0.2% in premarket trading.