High-Yield Stocks for Dividend Investing: Windstream Holdings

Income investors have had to work especially hard in the current low-interest rate environment to get dependable payouts from their portfolios, and high-yield dividend stocks have, therefore, become more popular than ever. One of the highest yielding stocks in the market is Windstream Holdings , which currently boasts a dividend that pays out almost 9% of its stock price annually. Yet, even though the stock has an impressive track record of sustaining its rich payout, Windstream has some investors questioning whether its dividend is too good to be true.

Windstream made a big move recently that promises to shift the playing field for the company and its income-focused investors. The company announced in July that it would break itself into two pieces, with Windstream putting most of its network assets into a separately traded real estate investment trust. The remaining company will focus on providing service to customers, and will lease the network infrastructure from the REIT entity. For dividend investors, Windstream's move will have huge consequences . REITs are required to pay out 90% of their taxable income in order to reap the benefits of not paying taxes at the entity level; as a result, the Windstream REIT will continue to pay a lucrative dividend.

Source: NASDAQ

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