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United States Cellular Corp USM

Morningstar Rating
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Stock XNYS Rating as of
$35.77 +0.81 (2.32%)
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As of Delayed Price Closed
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Company Report

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U.S. Cellular’s Core Mobile Phone Business Is Too Small to Effectively Compete with Huge Competitors

Matthew Dolgin

U.S. Cellular faces challenges that are a byproduct of its small regional scale in an industry that has come to be dominated by gigantic national wireless carriers. We think its core wireless business will continue to be challenged as a result. However, we’re optimistic about some of the other levers the firm is looking to pull in its operations, and U.S. Cellular holds assets that we think have significant value, including its portfolio of over 4,000 towers and a 5.5% stake in Verizon’s Los Angeles wireless business.

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Price vs Fair Value

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USM is trading at a 40% premium.
Price
$34.96
Fair Value
$87.00
Uncertainty
Very High
1-Star Price
$76.95
5-Star Price
$93.10
Economic Moat
Vqb
Capital Allocation
Nrqz

Bulls Say, Bears Say

Bulls

Offering fixed wireless can help mitigate a shrinking mobile phone customer base while also deepening U.S. Cellular’s ties to its customers.

Bears

Regional wireless carriers cannot compete in a consolidated wireless industry with gigantic national competitors that have much greater resources and cost advantages. U.S. Cellular will continually bleed market share.

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News

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Trading Information

Previous Close Price
$34.96
Day Range
$35.04–36.87
52-Week Range
$13.79–47.94
Bid/Ask
$31.01 / $0.00
Market Cap
$3.05 Bil
Volume/Avg
143,210 / 217,124

Key Statistics

Price/Earnings (Normalized)
99.13
Price/Sales
0.80
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

U.S. Cellular is a regional wireless carrier that serves about 4.5 million customers spread across four major geographic clusters: the Midwest, mid-Atlantic, New England, and the Pacific Northwest. These service territories encompass a total population of about 32 million people. The vast majority of the markets the firm serves are rural or second/third-tier cities, with only the greater Milwaukee and Oklahoma City regions boasting populations greater than 1 million. U.S. Cellular also owns a 5.5% stake in Verizon Wireless’ Los Angeles operations and, unlike its wireless carrier peers, owns most of its own towers.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Small Value
Total Number of Employees
4,300
Website
https://www.uscellular.com

Competitors

Valuation

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Metric
USM
VZ
TMUS
Price/Earnings (Normalized)
 99.138.2020.27
Price/Book Value
 0.661.733.00
Price/Sales
 0.801.212.48
Price/Cash Flow
 3.454.257.61
Price/Earnings
USM
VZ
TMUS

Financial Strength

Metric
USM
VZ
TMUS
Quick Ratio
 1.230.510.68
Current Ratio
 1.550.690.91
Interest Coverage
 1.524.014.30
Quick Ratio
USM
VZ
TMUS

Profitability

Metric
USM
VZ
TMUS
Return on Assets (Normalized)
 1.56%4.66%4.58%
Return on Equity (Normalized)
 3.71%18.99%14.49%
Return on Invested Capital (Normalized)
 3.64%7.89%6.73%
Return on Assets
USM
VZ
TMUS
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