Middle Coast Investing on Telephone and Data Systems, Inc. Series V Preferred Stock
Thesis
Series V preferred is another income-oriented TDS position with a dividend above 8%. The investor identifies a potential 23%-42% return if TDS decides to redeem the preferred stock, in addition to the current dividend income. The underlying premise is that TDS has sufficient resources to sustain dividends after restructuring its telecom holdings.
“I am holding those more for the income, and am confident TDS can cover those dividends for the foreseeable future.”
Key risks
- Redemption may not happen
- Underlying business cash flows could disappoint
- Capital needs for fiber and competitive threats