United States Cellular Corp (USM) & Its Peers Critical Analysis

United States Cellular Corp (NYSE: USM) is one of 36 public companies in the “Wireless Telecommunications Services” industry, but how does it contrast to its peers? We will compare United States Cellular Corp to related businesses based on the strength of its earnings, analyst recommendations, dividends, profitability, institutional ownership, valuation and risk.

Analyst Recommendations

This is a summary of current recommendations and price targets for United States Cellular Corp and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United States Cellular Corp 1 2 0 0 1.67
United States Cellular Corp Competitors 510 1567 1748 56 2.35

United States Cellular Corp presently has a consensus target price of $35.50, indicating a potential downside of 3.08%. As a group, “Wireless Telecommunications Services” companies have a potential upside of 20.79%. Given United States Cellular Corp’s peers stronger consensus rating and higher probable upside, analysts plainly believe United States Cellular Corp has less favorable growth aspects than its peers.

Valuation and Earnings

This table compares United States Cellular Corp and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
United States Cellular Corp $3.88 billion $625.00 million 63.16
United States Cellular Corp Competitors $27.19 billion $8.09 billion 7.38

United States Cellular Corp’s peers have higher revenue and earnings than United States Cellular Corp. United States Cellular Corp is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Institutional & Insider Ownership

14.8% of United States Cellular Corp shares are owned by institutional investors. Comparatively, 40.3% of shares of all “Wireless Telecommunications Services” companies are owned by institutional investors. 1.6% of United States Cellular Corp shares are owned by insiders. Comparatively, 12.5% of shares of all “Wireless Telecommunications Services” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares United States Cellular Corp and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United States Cellular Corp 1.25% 1.31% 0.68%
United States Cellular Corp Competitors -958.54% 4.60% -4.82%

Volatility and Risk

United States Cellular Corp has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, United States Cellular Corp’s peers have a beta of 0.78, suggesting that their average stock price is 22% less volatile than the S&P 500.

Summary

United States Cellular Corp peers beat United States Cellular Corp on 9 of the 13 factors compared.

About United States Cellular Corp

United States Cellular Corporation (U.S. Cellular) is a provider of wireless telecommunication services. The Company’s wireless operating markets are in the United States. U.S. Cellular provides service to postpaid and prepaid customers from a range of demographic segments. The Company focuses on retail consumers, government and small-to-mid-size business customers in industries, such as construction, retail, professional services and real estate. The Company offers a range of wireless devices, such as handsets, modems, mobile hotspots, home phones and tablets for use by its customers. U.S. Cellular offers wireless devices that are compatible with fourth generation long term evolution (4G LTE) and third generation (3G) networks. U.S. Cellular offers a range of accessories, such as carrying cases, hands-free devices, batteries, battery chargers, and memory cards to related consumer electronics, such as headphones, speakers and Bluetooth keyboards.

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