Why These 2 Big Dividends Are Still Dangerous, And 1 Is Becoming More Viable: Windstream Corporation (WIN) and More

United Online, Inc. (NASDAQ:UNTD)

Finally, we have United Online — the company behind FTD floral network; Internet service brands Juno and NetZero; and social websites such as Memory Lane, Classmates, and StayFriends. Earnings were just released this week, and the market was not happy, sending shares down by as much as 17%.

Revenues in all segments except for FTD floral — which the company plans to spin off — were down in the fourth quarter when compared to last year. On a yearly basis, revenue shrank 3.1% and earnings per share plummeted 76%.

Though the company is maintaining its dividend and only used 57% of its free cash flow to pay off its dividend in 2012, I don’t think it’s worth collecting the dividend if the underlying businesses and stock price are slowly deteriorating. With a current 6.3% yield, I guess you could hold the stock for 15 years and hope it still maintains its payout and you’d recoup your money, but I simply think there are better options out there.

The article Why These 2 Big Dividends Are Still Dangerous, And 1 Is Becoming More Viable 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 owns shares of United Online.

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