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Verizon and Peers: Assessing Returns on Equity in 3Q15

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Nov. 27 2015, Published 1:55 p.m. ET

T-Mobile’s return on equity in 3Q15

In 3Q15, T-Mobile’s (TMUS) ROE (return on equity) was 3.1%, compared with -2.6% in the same period last year and -1.2% in 3Q13. ROA (return on assets) improved YoY (year-over-year) in the last quarter as well, initially decreasing from -0.32% in 3Q13 to -0.70% in 3Q14, and then increasing to 0.95% in 3Q15. T-Mobile’s ROIC (return on invested capital) rose YoY from -37.1% in 3Q13 to 0.30% in 3Q14 and 3.2% in 3Q15.

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Verizon’s return on equity

In 3Q15, Verizon’s (VZ) ROE was 131.6%, compared with 93.9% in the same period last year and 25.9% in 3Q13. Its ROA was volatile YoY as well, increasing from 3.6% in 3Q13 to 6.6% in 3Q14 and 6.7% in 3Q15. Verizon’s ROIC decreased YoY from 30.4% in 3Q13 to 15.6% in 3Q14, and then increased marginally to 16.3% in 3Q15.

T-Mobile’s return on equity

In 3Q15, AT&T’s (T) ROE was 11.5%, compared with 13.6% in the same period last year and 17.8% in 3Q13. ROA decreased YoY from 5.6% in 3Q13 to 4.3% in 3Q14 and 3.3% in 3Q15. AT&T’s ROIC decreased YoY from 11.1% in 3Q13 to 9.3% in 3Q14 and 7.3% in 3Q15.

AT&T comprises 26.0% of the Vanguard Telecommunication Services ETF (VOX) and 14.3% of the iShares S&P Global Telecommunications ETF (IXP).

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