Critical Review: T-Mobile US (TMUS) versus The Competition

T-Mobile US (NASDAQ:TMUS) is one of 33 publicly-traded companies in the “Wireless Telecommunication Services” industry, but how does it compare to its rivals? We will compare T-Mobile US to similar companies based on the strength of its dividends, risk, earnings, institutional ownership, valuation, analyst recommendations and profitability.

Insider and Institutional Ownership

42.5% of T-Mobile US shares are held by institutional investors. Comparatively, 48.6% of shares of all “Wireless Telecommunication Services” companies are held by institutional investors. 0.3% of T-Mobile US shares are held by company insiders. Comparatively, 23.2% of shares of all “Wireless Telecommunication Services” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for T-Mobile US and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
T-Mobile US	0	6	21	1	2.82
T-Mobile US Competitors	320	908	1457	139	2.50

T-Mobile US presently has a consensus price target of $238.25, suggesting a potential upside of 52.29%. As a group, “Wireless Telecommunication Services” companies have a potential upside of 21.52%. Given T-Mobile US’s stronger consensus rating and higher possible upside, research analysts plainly believe T-Mobile US is more favorable than its rivals.

Dividends

T-Mobile US pays an annual dividend of $4.08 per share and has a dividend yield of 2.6%. T-Mobile US pays out 39.4% of its earnings in the form of a dividend. As a group, “Wireless Telecommunication Services” companies pay a dividend yield of 2.4% and pay out 41.9% of their earnings in the form of a dividend. T-Mobile US is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares T-Mobile US and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
T-Mobile US	$88.31 billion	$10.99 billion	15.10
T-Mobile US Competitors	$17.92 billion	$2.68 billion	22.18

T-Mobile US has higher revenue and earnings than its rivals. T-Mobile US is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Risk & Volatility

T-Mobile US has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500. Comparatively, T-Mobile US’s rivals have a beta of 1.99, suggesting that their average stock price is 99% more volatile than the S&P 500.

Profitability

This table compares T-Mobile US and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
T-Mobile US	12.05%	21.47%	5.68%
T-Mobile US Competitors	58.90%	11.39%	4.23%

Summary

T-Mobile US beats its rivals on 9 of the 15 factors compared.

T-Mobile US Company Profile

T-Mobile US, Inc., together with its subsidiaries, provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. The company offers voice, messaging, and data services to customers in the postpaid, prepaid, and wholesale and other services. It also provides wireless devices, including smartphones, wearables, tablets, home broadband routers, and other mobile communication devices, as well as wireless devices and accessories; financing through equipment installment plans; reinsurance for device insurance policies and extended warranty contracts; leasing through JUMP! On Demand; and High Speed Internet services. In addition, the company offers services, devices, and accessories under the T-Mobile and Metro by T-Mobile brands through its owned and operated retail stores, T-Mobile app and customer care channels, and its websites. It also sells its devices to dealers and other third-party distributors for resale through independent third-party retail outlets and various third-party websites. The company was founded in 1994 and is headquartered in Bellevue, Washington.