Middle Coast Investing on Telephone and Data Systems, Inc. Series U Preferred Stock
Thesis
Series U preferred provides a dividend yield above 8%, which is the main reason for the investment. A redemption to reduce interest costs could create an additional 23%-42% return, although that is not guaranteed. The investor is confident that the balance sheet and company resources can cover preferred dividends in the foreseeable future.
“I am holding those more for the income, and am confident TDS can cover those dividends for the foreseeable future.”
Key risks
- Preferred redemption may not occur
- Fiber deployment could tie up cash for longer than expected
- Satellite competition threatens the operating businesses