CenturyLink (CTL)has been generating some dividend cut discussion. Although it has a 37-year dividend-growth streak, key worries are integration risk from a couple of mergers and a high payout ratio of earnings. Additionally, CTL missed its dividend-increase anniversary in March, but it has done this before and still kept its streak alive. On the positive side, the payout ratio of free cash flow (FCF) is just 50%. Also, ROE and some other metrics don't flag a CTL dividend cut, and management has stated that they can do the mergers and maintain the dividend.
In 2008, when CTL's board boosted the quarterly dividend by more than 10x, it stated its intention to pay out "essentially all" of its FCF to shareholders rather than basing its payout ratio on earnings per share. The company then went six quarters before raising the dividend, and it may be on track for another six-quarter period between increases. While there may be no imminent danger of a cut, future increases may not be substantial. CTL’s last increase, in March, 2010, was 3.6%. Its yield is already high at about 7.3%.
Source: Seeking Alpha
Related Articles:
- Five Dividend Stocks To Buy On A Dip
- The Secret To Finding The Best Dividend Stocks
- 20 Dividend Stocks With A 20% Yield In 20 Years
- Seven Dividend Stocks Trading Below Fair Value
- How To Buy Dividend Stocks At The Bottom
Dividends in Danger: CenturyLink
Posted by D4L | Sunday, July 10, 2011 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
The fact is that there are many interesting high-yielding companies that have good long-term prospects. Besides, as the markets get more vol...
-
A common measure of dividend sustainability is the payout ratio, the percent of earnings that are paid out to shareholders. Unfortunately, e...
-
Part of the joy of investing is seeing your good investments continue to grow, years after your initial purchase. Aside from the financial s...
-
Good income investments often come with strong dividend yields, delivering income that's higher than an investor could find at a bank or...
-
A lot changes when you shift from working to retirement, including how you invest. Most investors switch from building a nest egg to living ...
-
Last month we wrote about the top four companies in our model portfolio in the article 4 Dividend Dominators for 2021 - Companies With More ...
-
Both of the listed stocks are often discussed on the Reddit page, and for very different reasons. The former pays a frequent special dividen...
-
Interest rates remain very low and given the ongoing economic impact from COVID-19, they will likely stay very low. This low-rate environmen...
-
When it comes to dividend stocks, investors can fall into the trap of focusing on dividend yield over all else. That can be a dangerous stra...
-
Safety and tranquility are both important aspects of investing for retirement. Yes, we want stocks with meaningful upside. We also -- howeve...

0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.