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T-Mobile Hints At The Possibility Of A Dividend If M&A Doesn't Manifest

T-Mobile Hints At The Possibility Of A Dividend If M&A Doesn't Manifest

UBS analyst John Hodulik maintains his Buy rating on shares of T-Mobile US Inc (NASDAQ: TMUS) and $80 price target following strong second-quarter earnings results.

The company posted $10.2 billion in sales, significantly beating the Street’s estimated $9.81 billion. EPS came in a $0.67.

Management also upped guidance for 2017 adjusted EBITDA and postpaid customer gains.

Shares opened Thursday up 3.1 percent immediately began working down to below Wednesday’s close, a surprise for many investors reacting to bullish analyst commentary.

Growth, One Way Or Another

Investors may be disappointed by the lack of news on the M&A front during the earnings call.

T-Mobile has been put on the sidelines by Sprint Corp (NYSE: S), which has entered exclusive negotiations with Comcast Corporation (NASDAQ: CMCSA) and Charter Communications, Inc. (NASDAQ: CHTR) about a potential wireless service partnership.

Hodulik isn’t concerned though, saying he got the impression T-Mobile is seeking to restart talks with Sprint when the exclusive negotiations close later this month.


While a merger with Sprint would likely provide the greatest possible value-creation, “management sees a number of strategic options available to it,” according to Hodulik.

Something that ought to get investors excited though, is the potential for T-Mobile to begin paying out dividends.

Management indicated that it would only do so if consolidation proved to be impossible.

AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) have both paid dividends for decades.

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Image Credit: By Mike Mozart [CC BY 2.0 (], via Wikimedia Commons

Latest Ratings for TMUS

Oct 2019Initiates Coverage OnOutperform
Aug 2019DowngradesOutperformPerform
Aug 2019MaintainsStrong Buy

View More Analyst Ratings for TMUS
View the Latest Analyst Ratings

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