Telecom Companies May Struggle to Maintain High Dividend Pay-Outs
June 01, 2012 08:20 ET
Telecom Companies May Struggle to Maintain High Dividend Pay-Outs
Five Star Equities Provides Stock Research on CenturyLink and Windstream
NEW YORK, NY--(Marketwire - Jun 1, 2012) - Dividends have been gaining popularity among investors as treasury yields and interest rates are at record lows. The telecom industry is highly regarded among dividend investors, as several domestic telecom operators have dividend yields exceeding 5 percent. Five Star Equities examines the outlook for companies in the Telecom Industry and provides equity research on CenturyLink, Inc. (
Access to the full company reports can be found at:
[ www.FiveStarEquities.com/CTL ]
[ www.FiveStarEquities.com/WIN ]
But a recent report released by Standard & Poor's states that telecom companies may have hard time maintaining their high yields. "Returning cash to shareholders through dividends and share buybacks and the pressure to satisfy equity investors lessens their ability to pay back debt and maintain or reduce leverage," said Standard & Poor's credit analyst Allyn Arden in the report. "These companies may need to adopt more conservative financial policies and reduce leverage to be able to maintain their current ratings down the line," added Mr. Arden.
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CenturyLink is the third largest telecommunications company in the United States. The company provides broadband, voice, wireless and managed services to consumers and businesses across the country. It also offers advanced entertainment services under the CenturyLink Prism TV and DIRECTV brands. The company currently offers investors an annual dividend of $2.90 per share for a yield of 7.39 percent.
Windstream is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas. Windstream has more than $6 billion in annual revenues. The company currently offers investors an annual dividend of $1.00 per share for a yield of 10.73 percent.
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