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Why Fundamental Investors Might Love Telephone and Data Systems, Inc. (NYSE:TDS)

Jodi Pearce

As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Telephone and Data Systems, Inc. (NYSE:TDS), it is a highly-regarded dividend payer that has been a rockstar for income investors, currently trading at an attractive share price. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Telephone and Data Systems here.

Established dividend payer and good value

TDS is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Also, relative to the rest of its peers with similar levels of earnings, TDS’s share price is trading below the group’s average. This supports the theory that TDS is potentially underpriced.

NYSE:TDS Intrinsic Value Export January 7th 19

Income investors would also be happy to know that TDS is a great dividend company, with a current yield standing at 1.8%. TDS has also been regularly increasing its dividend payments to shareholders over the past decade.

NYSE:TDS Historical Dividend Yield January 7th 19

Next Steps:

For Telephone and Data Systems, there are three important factors you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for TDS’s future growth? Take a look at our free research report of analyst consensus for TDS’s outlook.
  2. Historical Performance: What has TDS’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of TDS? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.