While Telephone and Data Systems (NYSE:TDS) Shareholders Have Made 104% in 1 Year, Increasing Losses Might Now Be Front of Mind as Stock Sheds 10% This Week
Telephone and Data Systems, Inc. (NYSE:TDS) shareholders might be concerned after seeing the share price drop 23% in the last quarter. But looking back over the last year, the returns have actually been rather pleasing! After all, the share price is up a market-beating 93% in that time.
While the stock has fallen 10% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
During the last year, Telephone and Data Systems actually saw its earnings per share drop 817%. This was, in part, due to extraordinary items impacting earning in the last twelve months.
Given the share price gain, we doubt the market is measuring progress with EPS. Indeed, when EPS is declining but the share price is up, it often means the market is considering other factors.
Absent any improvement, we don't think a thirst for dividends is pushing up the Telephone and Data Systems' share price. It saw it's revenue decline by 5.2% over twelve months. Usually that correlates with a lower share price, but let's face it, the gyrations of the market are sometimes only as clear as mud.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at Telephone and Data Systems' financial health with this free report on its balance sheet.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Telephone and Data Systems the TSR over the last 1 year was 104%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
It's good to see that Telephone and Data Systems has rewarded shareholders with a total shareholder return of 104% in the last twelve months. Of course, that includes the dividend. That certainly beats the loss of about 7% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Telephone and Data Systems you should be aware of.
But note: Telephone and Data Systems may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
留意すべきは、この記事で引用されている市場リターンは、現在オーストラリア取引所で取引されている株式の市場加重平均リターンを反映しています。総株主収益株価収益株価収益シェア価格リターンは、シェア価格の変化のみを反映しているのに対し、TSRには配当金(再投資された場合)、割引資本調達またはスピンオフの利益が含まれます。TSRは、株式の生成される収益のより包括的な画像を提供すると言えます。Telephone and Data Systemsについては、過去1年間のTSRは104%で、上記のシェア価格リターンよりも優れています。これは主にその配当によるものです!
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オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。