Dividends4Life: The Skinny on This Fat 7.7% Yield

The Skinny on This Fat 7.7% Yield

Posted by D4L | Thursday, October 03, 2019 | | 0 comments »

It sounds like the dumbest investment strategy in the world: buying shares of companies that have recently slashed their dividends. Executives, after all, loath to cut their distributions. Such actions signal a big problem in the business. And because such measures anger shareholders, it often triggers an investor stampede for the exit. That said, such situations sometimes create opportunities.

Case in point: CenturyLink Inc (NYSE:CTL). The telecom company has struggled for years with falling sales, tighter margins, and a big debt load. That forced management to cut the company’s dividend by more than half last year. The thing is, this might have created an opportunity for income hunters. Thanks to the plunge in CenturyLink’s stock price, CTL stock now yields a fat 7.7%. But can the company sustain even this lower payout? Let’s dive into the financials.

Source: Income Investors

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