Dividends4Life: Most Promising Telecom Dividend Stocks

Most Promising Telecom Dividend Stocks

Posted by D4L | Tuesday, November 20, 2012 | | 0 comments »

Let's focus on the dividend growth rate first, where CenturyLink (NYSE: CTL) and BCE (NYSE: BCE) lead the way. Their growth rates are so steep, though, that they may be hard to maintain for long. CenturyLink actually hasn't boosted its payout much in the past few years, after a big bump in 2008. It's the top dog in the rural telecom field, and seems better positioned than its rivals, thanks in part to several acquisitions. BCE, focused on Canada, has a more attractive payout ratio and offers a range of services, such as Internet and satellite TV. Its net margins are strong and growing, but its debt is growing, too.

As I see it, CenturyLink and BCE offer the best combination of dividend traits, sporting some solid income now and a reasonable chance of strong dividend growth in the future. You might also opt for the dividend yields near 10%, but if you do, keep an eye on the companies' progress, lest you end up blindsided by a big dividend cut. Some of the smaller players are also worth a look. Atlantic Tele-Network (Nasdaq: ATNI), for example, has a yield of only about 2.6%, but it has been growing that at a good clip, and has a lot of room for more growth. It serves the Caribbean and North America, and recently beat analysts' earnings estimates, as it boosted it profit margins. It's seeing its prepaid subscribership grow and is aiming to grow its postpaid subscriber rolls as well.

Source: Motley Fool

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