Sunday, May 28, 2017
T-Mobile is turning the mobile business upside down

T-Mobile is turning the mobile business upside down


T-Mobile (TMUS) is not cheap but the company is turning the mobile industry upside down.  Its has grown its netwrork size so that it is now a comparable size to the big networks and offering a quality of service that is as good or better.

Growth shows no sign of slowing down.  T-mobile added 1.1 million new customers and won 45% of all new spectrum auctioned off by the government last quarter.  Revenue climbed 11% to $9.6 billion and EPS was 48 cents minus items, up 380% from the previous year.

While TMUS invests in growth its competitors are saddled with investors who demand large dividend payouts.  They continue to operate as if they are a duopoly while the world is changing rapidly.  Facing a shareholder revolt these companies will not be able to cut their dividends until there is a crisis and by then it may be too late.

TMUS’ current PE is a lofty 34.85 compared to Verizons 15.29. But that reflects the opportunity available with Verizon declining and TMUS expected to grow rapidly.

Risk Disclaimer: This article does not constitute a recommendation to buy or sell. Investing in stocks or other securities and derivatives is a high-risk activity and not suitable for everyone. It is strongly recommended that individuals should consult with a SEC-registered investment adviser prior to making any investment decisions.

Disclosure: The author holds no positions in any of the stocks mentioned nor has any intentions to initiate any in the next 72 hours.