Is This Huge Dividend Still Safe?

After completing a bet-the-farm acquisition of rural accounts from Verizon (NYSE: VZ) , Frontier set about upgrading the new assets in order to comply with government-imposed conditions for the deal. The company has been pumping a huge part of its cash flows into that juicy 10% dividend yield, even as it rolls out expensive infrastructure upgrades on the old Verizon stuff. And so we arrive at this morning's second-quarter report. Sales more than doubled year over year to $1.3 billion, while earnings fell by 8% to $32 million, or by 45% to $0.06 per share when you account for the massive dilution that came with the Verizon deal a year ago. All of this was in line with Wall Street estimates, but investors weren't impressed; shares swooned as much as 8.1% on the news before climbing back to a less preposterous fall.... Read more