CenturyLink, Inc. (CTL): This High Yielding Telecom Company Has Good Growth Prospects

Growth prospects

During the recent quarter, CenturyLink, Inc. (NYSE:CTL) added 67,000 new broadband subscribers which took its customer base to 5.91 million. This was amid the slowing PC sales, which corroborates the fact the easy availability of Full HD content is driving up bandwidth requirements.

Although mobile networks also provide 3G and 4G services, their exorbitant pricing structure makes it economically unviable to stream and download high resolution content. Now that Ultra HD is making an entry, it would be safe to expect a steady increase in high speed broadband users.

Its Prism TV is also growing at an impressive rate. The company added 13,400 new subscribers during Q1, which took its overall subscriber base to 120,000 (a 12.5% addition).

Talking about its data centers, CenturyLink added 15,000 sq. ft. in its saleable area during Q1. Additionally, the company is also planning to launch 10 new data centers in different metropolitan cities, which collectively add around 90,000 sq. ft in total area. That combined with its expansion during Q1 takes its total area increase to around 105,000 sq. ft. (for entire 2013).

Final words

The company already owns 2.4 million sq. ft. of data center space, and its expansion would increase its existing space by around 4.3%. With that in mind, I think CenturyLink, Inc. (NYSE:CTL) has been beaten down perhaps a bit too much. It has ample growth prospects and carries a hefty yield with possibly $400 million worth of pending share repurchases for 2013.

Piyush Arora has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article This High Yielding Telecom Company Has Good Growth Prospects originally appeared on Fool.com.

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