Morningstar Rating

Stock Research and Analysis

by Michael Hodel, CFA

Bulls Say

U.S. Cellular holds several assets that are attractive to other carriers and would likely fetch hefty valuations if sold in pieces. We estimate that the firm's spectrum alone would command $2 billion-$3 billion on the open market.
Investments in wireless partnerships, including Verizon's Los Angeles operation, have generated $150 million in distributions for U.S. Cellular over the past year.
A solid balance sheet should enable U.S. Cellular to invest needed capital in the business without delay, enabling the firm to maintain a strong network. Read more 

Bears Say

U.S. Cellular simply doesn't have the scale to compete against giants AT&T and Verizon. Both rivals have invested aggressively, both organically and through M&A, to expand network reach, putting both directly in competition with U.S. Cellular in most markets.
Sprint and T-Mobile have also expanded geographic coverage to most of the larger markets U.S. Cellular serves.
The Carlson family controls the voting interests at Telephone and Data Systems, which in turn controls U.S. Cellular. The family doesn't seem interested in selling the wireless business. Read more 

Management

We've moved our stewardship rating on U.S. Cellular to Poor, reflecting years of poor capital allocation decisions and the continued influence of the same decision makers. While recent moves, notably the sale of operations in Chicago and St. Louis,   Read more 

Profile

U.S. Cellular is the nation's fifth-largest wireless service provider, with 4.7 million customers across the U.S. The company's operations are spread across several geographic   Read more 

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