Our Evaluation Of CenturyLink's Ability To Pay Its Dividend

In August, we published our report analyzing AT&T's (T) ability to pay its dividends to shareholders. We are aware of how dividends are not an ordinary and necessary business expense, which explains why such payments are not tax-deductible for dividend-paying businesses. At the same time, dividend-paying companies have an implicit obligation to shareholders to pay dividends because such cash flows belong to the shareholders. If the company can't invest said cash flows in projects that meet or exceed the cost of equity capital, and if the company is not facing a 1929 or 2008 macroeconomic shock, then it is duty-bound to return those cash flows to shareholders. Based on the positive reception from our report evaluating AT&T's dividend-paying ability, we analyzed and evaluated AT&T's former subsidiary and current competitive peer Verizon Communications (VZ). Based on the subsequent positive reception from that article, we are extending this series to analyze and... Read more