Should you buy TDS stock as shares pullback despite declaring a quarterly dividend?

on Nov 30, 2021
  • Telephone and Data Systems shares fell by more than 2% on Tuesday.
  • The company announced a quarterly dividend of $0.175 per share on Monday.
  • The TDS stock now trades at a forward dividend yield of 3.88%.

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On Tuesday, Telephone and Data Systems Inc. (NYSE:TDS) shares edged lower by more than 2% despite declaring a quarterly dividend. The company announced a dividend per share of $0.175 on Monday in line with previous payments, reflecting a forward dividend yield of 3.71%. However, Tuesday’s decline pushed the forward annual yield higher to 2.88%

The dividend is payable on the 30th of December to shareholders of record as of the 15th of December. The stock goes ex-dividend on the 14th of December. The US telecommunications company’s shares have plummeted by more than 30% since the 11th of June for a net year-to-date decline of about 3.79%.

Is it an opportunity to buy?

The decline has pushed the company’s valuation to a trailing 12-month P/E ratio of 17.56, thus making it a compelling option for value investors.

In addition, analysts Telephone and Data Systems earnings per share to increase by 88.40% this year before rising by a further 13.66% next year.

Therefore, long-term growth investors could also find it as an exciting option to add to their portfolios.

Source – TradingView

Technically, Telephone and Data Systems shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has plunged closer to the oversold conditions of the 14-day RSI.

Therefore, investors could target potential rebounds at about $18.75, or higher at $19.50, while $17.40 and $16.72 are crucial support zones.


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