Gauging The Safety Of Telecom Dividends

Few industries dish out dividends as generously as telecommunications. Shares of industry leaders Verizon Communications (NYSE: VZ) yield 4.1 percent, while AT&T's (NYSE: T) stock offers a current return of 5 percent. Names further down the food chain offer even bigger yields: CenturyLink (NYSE: CTL) yields almost 7 percent, Consolidated Communications (NSDQ: CNSL) yields 8.7 percent, Frontier Communications Corp (NYSE: FTR) yields 9.8 percent and Windstream Corp (NSDQ: WIN) yields more than 12 percent. But sweet yields can bring sour consequences in this highly competitive industry. Shares of CenturyLink, for example, lost a quarter of their value on Valentine's Day 2013, after the company slashed its dividend by 25 percent. Frontier Communications has cut its payout by 60 percent since summer 2010-the primary reason that the stock lost almost half its market value over this period. Add Alaska Communications Systems (NSDQ: ALSK) to... Read more