UZF - United States Cellular And Telephone and Data Systems: The Preferreds Could Be A Potent Investment

2024-03-06 00:32:54 ET

Summary

• Telephone and Data Systems Series VV preferreds offer a near-10% dividend yield and are trading for 63 cents on the dollar.
• TDS owns 83% of USM and initiated a sales process in August, attracting interest from T-Mobile, AT&T, and Verizon.
• The sale could close sometime in the next six months, as pending Fed rate cuts look set to boost the value of USM's bonds and TDS' preferreds.

I've been buying Telephone and Data Systems ( TDS ) 6.00% Series VV Cumulative Preferreds ( TDS.PR.V ) since the back end of 2023 with a view to holding these for at least five years. They stand to capitalize on possible dual near-term catalysts from the pending sale of the United States Cellular ( USM ) and Fed cuts to base interest rates set to kick off this summer. TDS owns 83% of the combined total of the outstanding common shares of USM and initiated a sales process for this asset last year....

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