NTELOS: A Telecom With a Big Dividend and a Big Target on its Back

NTELOS Holdings Corp. [(NTLS) - $20)] is a regional telecommunications firm offering an above average yield and the opportunity for capital gains based on its potential acquisition by others. Serving Appalachia and rural Virginia, West Virginia, Maryland, and Pennsylvania, NTLS provides both wire line and wireless services. The company continues to roll out its wire line fiber-optics network through both organic growth and acquisitions of smaller competitors. Its wireless segment is the exclusive Sprint Nextel (S) franchisee in its service area. With a dividend of $1.12 per share, NTELOS' current yield is 5.4%. While national telecoms offer comparable yields, the NTELOS yield is substantially above its regional peers. In Dec 2010, management announced it was splitting into two companies - wire line and wireless. The separation should take place in the second half of 2011. The justification is as usually announced, with the ultimate goal of increasing shareholder value. In... Read more