Reviewing BlackBerry (BB) & Telephone & Data Systems (NYSE:TDS)

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Telephone & Data Systems (NYSE: TDS) and BlackBerry (NYSE:BB) are both mid-cap utilities companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, dividends, valuation and risk.

Analyst Ratings

This is a summary of current ratings and recommmendations for Telephone & Data Systems and BlackBerry, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telephone & Data Systems 0 0 1 0 3.00
BlackBerry 3 9 4 0 2.06

BlackBerry has a consensus price target of $10.73, indicating a potential upside of 2.52%. Given BlackBerry’s higher possible upside, analysts clearly believe BlackBerry is more favorable than Telephone & Data Systems.

Profitability

This table compares Telephone & Data Systems and BlackBerry’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telephone & Data Systems 3.03% 1.30% 0.67%
BlackBerry 43.46% 3.70% 2.46%

Volatility & Risk

Telephone & Data Systems has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500. Comparatively, BlackBerry has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Dividends

Telephone & Data Systems pays an annual dividend of $0.64 per share and has a dividend yield of 2.3%. BlackBerry does not pay a dividend. Telephone & Data Systems pays out 120.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telephone & Data Systems has increased its dividend for 43 consecutive years.

Insider and Institutional Ownership

82.3% of Telephone & Data Systems shares are held by institutional investors. Comparatively, 59.1% of BlackBerry shares are held by institutional investors. 17.3% of Telephone & Data Systems shares are held by insiders. Comparatively, 22.7% of BlackBerry shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Telephone & Data Systems and BlackBerry’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Telephone & Data Systems $5.04 billion 0.62 $153.00 million $0.53 53.45
BlackBerry $932.00 million 6.03 $405.00 million $0.05 209.40

BlackBerry has lower revenue, but higher earnings than Telephone & Data Systems. Telephone & Data Systems is trading at a lower price-to-earnings ratio than BlackBerry, indicating that it is currently the more affordable of the two stocks.

Summary

BlackBerry beats Telephone & Data Systems on 11 of the 17 factors compared between the two stocks.

Telephone & Data Systems Company Profile

Telephone and Data Systems, Inc., a telecommunications company, provides wireless, wireline, cable, and hosted and managed services in the United States. The company offers cellular services, such as postpaid national plans and prepaid service plans with voice, messaging, and data usage options; and business rate plans. It also offers wireless devices comprising handsets, tablets, mobile hotspots, home phones, and routers; and including accessories, including wireless basics, such as cases, screen protectors, chargers, and memory cards, as well as an assortment of consumer electronics comprising headphones, speakers, wearables, and home automation products. In addition, the company provides wireline and cable broadband services; digital television (TV) and digital satellite TV video services; voice services comprising local and long-distance telephone, voice over Internet protocol, find me follow me, collaboration, instant messaging, and other services; and network access services. Further, it offers a range of information technology (IT) services, including colocation, cloud and hosting solutions, managed services, and enterprise resource planning application management services; sells IT hardware, as well as provides related maintenance and professional services; and engages in planning, engineering, procurement, sale, installation, and management of IT-infrastructure solutions. Additionally, the company operates retail stores and kiosks. The company serves approximately 5.1 million wireless customers and 1.2 million wireline and cable customers. Telephone and Data Systems, Inc. sells its products through retail sales, direct sales, third-party retailers, and independent agents, as well as through Website and telesales. The company was founded in 1968 and is headquartered in Chicago, Illinois.

BlackBerry Company Profile

BlackBerry Limited operates as security software and services company in securing, connecting, and mobilizing enterprises worldwide. The company operates in three segments: Software & Services, Mobility Solutions, and Service Access Fees (SAF). The Software & Services segment offers enterprise software and services, including mobile-first security, productivity, collaboration, and end-point management solutions for the Enterprise of Things through the BlackBerry Secure platform; BlackBerry technology solutions, such as BlackBerry QNX, Certicom, Paratek, BlackBerry Radar, and intellectual property and licensing; AtHoc, which provides secure, networked crisis communications solutions; SecuSmart that offers secure voice and text messaging solutions with encryption and anti-eavesdropping facilities; licensing and services related to BlackBerry Messenger; and cybersecurity consulting services and tools. The Mobility Solutions segment engages in the development and licensing of secure device software and the outsourcing to partners of design, manufacturing, sales, and customer support for BlackBerry-branded handsets. This segment also develops software updates for its legacy BlackBerry 10 platform, and delivers BlackBerry productivity applications to Android smartphone users via the Google Play store; and sells its DTEK60, DTEK50, Priv, Leap, and Passport smartphones and smartphone accessories, as well as offers non-warranty repair services. The SAF segment consists of operations related to subscribers using mobile devices with its legacy BlackBerry 7 and prior operating systems. BlackBerry Limited has a strategic collaboration with Qualcomm Technologies, Inc. and Microsoft Corp. The company was formerly known as Research In Motion Limited and changed its name to BlackBerry Limited in July 2013. BlackBerry Limited was founded in 1984 and is headquartered in Waterloo, Canada.

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