In the Wake of a Dividend Cut, What’s an Investor to do with CenturyLink, Inc. (CTL)?

The bottom line

CenturyLink is a profitable company that is working to branch out its operations into newer technologies.  It’s certainly in a better situation that its rural land-line peers, but it’s nonetheless in a challenging period.  The company is committed to paying down debt and being able to actually afford its dividend out of its earnings, both of which are good things.

Investors who may not want the headache of having to pay close attention to CenturyLink’s progress going forward should consider AT&T and Verizon.  On the plus side for CenturyLink, due to the stock’s dramatic decline, the yield is almost where it was before the dividend cut.  New investors will still be getting a 7% yield, better than the yield on both AT&T and Verizon.  However, both AT&T and Verizon offer solid cash flows and better businesses.

For me, CenturyLink having a better dividend yield by a couple percentage points doesn’t offset its declining land-line business.  Each investor will have to make this decision for themselves, but for me, I’d prefer either AT&T or Verizon to CenturyLink.

The article In the Wake of a Dividend Cut, What’s an Investor to do with CenturyLink? originally appeared on Fool.com and is written by Robert Ciura.

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