Dividend Cut Causes a Run on Small Telecoms: Windstream Corporation (WIN) and More

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As far as Frontier goes, the company has suffered a decline in revenue over the first three quarters of 2012, and earnings have stayed flat. Of course, this wouldn’t be a huge problem if the dividend was safe. Over the first three quarters of 2012, Frontier has only used 49% of its free cash flow to pay out its dividend — meaning that, on paper, its dividend should be safe.

It probably doesn’t hurt that today’s dividend payout is roughly half of what it was for Frontier shareholders over a year ago.

The company is scheduled to release earnings after the market closes next Thursday. While its juicy dividend is tempting, every Frontier investor has to understand that it’s not a sure thing.

The article Dividend Cut Causes a Run on Small Telecoms originally appeared on Fool.com and is written by Brian Stoffel.

Fool contributor Brian Stoffel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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