A previous version of this story cited the wrong subscriber numbers for AT&T, Verizon and Sprint. TheStreet regrets this error.
NEW YORK (TheStreet) -- Newton's first law of motion applies to telecom investing: T-Mobile U.S. (TMUS - Get Report) is the body in motion that will stay in motion -- and it's also the best investment among the big four wireless carriers, according to analysts.
Among seven analysts TheStreet consulted, four and a half -- one split a vote between AT&T (T - Get Report) and T-Mobile -- favored T-Mobile over any one of the other wireless carriers. Sprint (S - Get Report), Verizon (VZ - Get Report) and AT&T each got at least half a vote.
T-Mobile's shares, which opened at $39.20 Tuesday, are up 45.7% for the year, noted Colby Synesael, senior equity research analyst at Cowen. Synesael rates T-Mobile shares as "outperform."
Meanwhile, AT&T is up 3.8% and Verizon is up just 0.9%, and Sprint's shares are down 10.6%.
Synesael's pick among the big four is T-Mobile as the "proven entity" showing higher stock and subscriber growth.
"The best stock pick depends on your investment horizon, but T-Mobile has tremendous momentum," said Jonathan Chaplin, managing partner at New Street Research. "It's experiencing all the growth in the industry and, on top of that, has a lot of optionality in M&A."
T-Mobile is reportedly in talks with Dish Network (DISH - Get Report) about a deal, and has in the last four years had offers from AT&T -- which U.S. regulators thwarted -- and Iliad (ILIAY), which T-Mobile rejected. Sprint endeavored but failed to convince regulators about the benefits of a merger with T-Mobile. Chaplin has a "buy" rating on T-Mobile and $50 price target.
"T-Mobile is the only carrier gaining market share," said Craig Moffett, senior research analyst at MoffettNathanson. He also believes that T-Mobile's valuation should be higher, since all the big carriers trade at roughly the same multiple, but T-Mobile's earnings performance trumps the others. MoffettNathanson has a "buy" rating on T-Mobile and a price target of $45.
Jennifer Fritzsche, managing director at Wells Fargo, presented a contrarian view. She disagreed that T-Mobile is the best investment among the big four. In fact, it's the only one she doesn't recommend. She expressed concern that T-Mobile's new subscribers come from less profitable segments of the telecom market and said she believes Sprint's assets are undervalued.
Fritzsche pointed out that T-Mobile isn't taking many subscribers from the other carriers. Although T-Mobile added 991,000 in the first quarter of 2015, Verizon lost 138,000, AT&T lost 270,000 and Sprint lost 201,000, which leaves 382,000 coming from alternate sources.
She prefers Sprint of the big four, she said, because it has the most spectrum and its network performance is improving, according to mobile research firm RootMetrics. She has an outperform rating on Sprint and price target of $8 to $10 per share. For T-Mobile, Fritzsche has a market perform rating and a price target range between $37 and $40 per share.
Spokespeople for T-Mobile and Sprint declined comment.
The analysts agreed that Verizon and AT&T are the best bets for investors who prefer stability and comfortable dividends to volatility. Verizon got a vote for the diversification of its product mix. AT&T got a half vote (split with T-Mobile) for upside in connection with AT&T's upcoming acquisition of DirecTV (DTV - Get Report).
The telecom space has for the last couple of decades experienced a price war, with one carrier offering a promotion with discounts, and the others following suit the next day, said Bill Menezes, principal research analyst at Gartner. How the consumer pays depends on the bundle he purchases: the type of phone; how many family members on a plan; the cost of voice, text and data; the type of data and how it is apportioned.
Even so, said an analyst who preferred to remain anonymous, pricing tends to be similar, despite the price wars. For instance, a family plan with an Apple (AAPL - Get Report) iPhone for two people sharing 10 gigabytes of data costs about $160 at Verizon and AT&T. A similar plan is only 10% to 15% less at T-Mobile and Sprint.
The best quality depends on where the consumer is located, said Brian Haven, senior research analyst at IDC. Before wireless, carriers were regional companies and built networks to best service customers in their areas of operation.
RootMetrics rates wireless network performance in qualities like speed and reliability. Verizon and AT&T tend to rank highly throughout the nation, said Julie Dey, vice president of marketing at RootMetrics, but Sprint and T-Mobile are improving. In fact, "all four carriers are improving," which is good news for consumers. Sprint wins in areas like Kansas City and Indianapolis, while T-Mobile comes out on top in Boston and Philadelphia.
The disruptive force in the industry for the last couple of years has been T-Mobile, the analysts agreed, with its Uncarrier initiative which began in March 2013.
With Uncarrier, T-Mobile removed fixed-term contracts, meaning customers no longer committed themselves to two years with a particular carrier. Customers could pay month-to-month for as long or short a time as they wanted. In other iterations of Uncarrier, customers could upgrade phones several times a year or avoid extra service charges in certain countries.
Other carriers had to respond with similar plans. In the case of AT&T and Verizon, which are two and three times the size of Sprint or T-Mobile, the effects of competition are slim. Churn is down throughout the industry due to the complexities and extra costs associated with moving family plans from one carrier to another, said the anonymous analyst.
Margins are difficult to decipher.
Verizon and AT&T are so large with so much marketing muscle, they're "not killing themselves to compete," said Menezes. They also have fixed network services and other businesses that Sprint and T-Mobile lack. For instance, AT&T is acquiring DirecTV for satellite TV and Verizon is acquiring AOL for digital advertising. AT&T and Verizon can easily match most any promotion from Sprint and T-Mobile, added Menezes.
A spokesperson for AT&T said, "We're committed to our quarterly dividend, which we've increased an industry-leading 31 straight years. We're also focused on diversifying our revenue mix and positioning for growth. Our pending DirecTV deal and our recent entry into the Mexican wireless market will help us do both."
A spokesperson for Verizon declined comment.