Verizon Communications Inc. (VZ), AT&T Inc. (T) and Windstream Corporation (WIN): Three Telecom Stocks For Attractive Dividends

AT&T Inc. (NYSE:T) pays an annual dividend of $1.80 per share, yielding over 5%. The company remains an extremely attractive dividend pick. As I mentioned above, business portfolio diversification has allowed the company to grow, and the growth has translated into cash flows. AT&T Inc. (NYSE:T) generated over $20 billion in free cash flows over the past twelve months, while the dividend payments were just over $10 billion. The payout ratio of about 50% of cash flows gives the company a lot of room to grow dividends in the future.

Windstream

Although Windstream Corporation (NASDAQ:WIN) Communications has a slightly different niche as compared to Verizon and AT&T, they do, nonetheless, have an overlapping audience. Windstream Corporation (NASDAQ:WIN) specializes in the provision of managed and cloud computing services to businesses. Furthermore, it provides broadband, phone and TV services to the rural areas.

The business model is an optimal mix of organic investments and acquisitions with its prime focus on business and broadband. Its recent collaboration with Avaya and Mitel for managed UC service offerings is two strategic moves that will enhance its customer base. Through these alliances a more unified communication services such as desktop video and VoIP lines will be made available.

Conclusion

All of the above mentioned companies are attractive dividend picks. However, AT&T Inc. (NYSE:T) is the best pick in my opinion. The company is a cash flows generating giant, which can easily maintain its dividends. On the other hand, Verizon Communications Inc. (NYSE:VZ)’s most lucrative segment, Verizon Wireless, is co-owned by Vodafone, and a large chunk of its cash flows go to Vodafone. Nonetheless, the company should be able to maintain its dividends. Finally, Windstream Corporation (NASDAQ:WIN) recently cut its dividends in the wake of falling revenues. However, I believe the current dividends are easily manageable and the company should continue to pay its dividends.

The article 3 Telecom Stocks For Attractive Dividends originally appeared on Fool.com and is written by Ishtiaq Ahmed.

Ishtiaq Ahmed has no position in any stocks mentioned. The Motley Fool recommends Vodafone. Ishtiaq is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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