Uncertainty Threatens Windstream Dividends

by Luke Jones  on Monday, Nov. 18, 2013 12:00 am  

Jeff Gardner, CEO of Windstream, says the company has transitioned to new revenue streams, but not all analysts agree. (Photo by Russell Powell)

Windstream, McCarver said, is all about single-digit growth in its revenue and cash flow, as well as continuing to pay that dividend.

“Third quarter could have been better, but it was within range of my expectations,” he said.

Capital expenditures have fallen, he said, and though the company’s consumer business revenue was falling, its business services revenue was growing.

“Again, as I said before, it’s single-digit growth,” he said. “They’re not going to grow their top line 10 percent. It’s going to grow 1 or 2 or 3 percent.”

He said he expects that growth to happen organically in two or three quarters.

“They lost a lot of small businesses but they gained large enterprise,” he said. “I can understand that: One large enterprise makes up for the small business losses.”

And as for CFO Tony Thomas’ view: “We’re making progress, and there’s more progress to come in 2013.”

Last week, Windstream stock was trading between $8 and $8.25, down from $8.75 in late September.

Dividend Changes

Windstream Holdings Inc.’s dividend, $1 per year, is one of the most attractive parts of that company’s stock, and executives have repeatedly reassured investors that the dividend isn’t going to change.

But the dividend’s taxability did change earlier this year, something that few analysts are talking about.

Windstream announced that, starting in July, only about 66 percent of returns from the dividend would be considered non-taxable income.



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