Frontier Communications Corp (FTR), CenturyLink, Inc. (CTL): Regional Telcos That Are Riskier Than You Think

Windstream Corporation (NASDAQ:WIN) has stuck to its $0.25 a share quarterly rate since 2006, even though it hasn’t earned enough to cover its rate for a couple of years now. Roughly two-thirds of last year’s disbursements were actually a return of capital.

It isn’t a surprise that the least risky telco here is the one with the lowest yield. CenturyLink, Inc. (NYSE:CTL) is the only one earning more than the size of its dividend this quarter.

Frontier Communications Corp (NASDAQ:FTR), CenturyLink, Inc. (NYSE:CTL), and Windstream Corporation (NASDAQ:WIN) are trying to offset the landline customer defections by offering broadband connectivity and business services. It’s a good plan, even in the rural markets where they tend to concentrate so they don’t have to compete with the deep pockets of the national wireless rock stars.

However, all three companies are generating less revenue now than they were a year ago. Until that changes, the companies will continue to be among the riskiest plays in telecommunications. The declines don’t have to last forever. An improving economy may very well change things dramatically for all three companies. Investors just need to know that the risks are great as they dial in to these fat-yielding investments.

The article 3 Regional Telcos That Are Riskier Than You Think originally appeared on Fool.com.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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