Frontier Communications’ Dividend: How Safe Is Safe?

We noted in our last article that Frontier Communication’s (FTR) dividend was safe through 2013 but predicated this on the following:

  1. FTR follows through with the following statement in the 8-K: “We plan to have ample cash to pay down the 2013 debt and we will be opportunistic in refinancing all or part of the 2014 and 2015 debt.”
  2. There are no major pension surprises – i.e., it meets its expected return.
  3. Additional integration costs actually end in 2012.

This article revisits the above in an attempt to determine if FTR is making any progress, or lack thereof since these have a direct impact on FCF (free cash flow) and by default the dividend.

…Click here to continue to the full article at SA…


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2 Responses to Frontier Communications’ Dividend: How Safe Is Safe?

  1. This is a decent article, may father who was an adviser told
    me.. Although it is more important to invest in a highly
    profitable business than a business that has superior management, you should watch out for snakes.
    Even businesses that are extremely profitable at the moment can be
    bad investments if extremely bad management is in control.
    If you discover a business with management practices that make you leery, then stay away.

  2. IIEX says:

    I agree and the landscape is littered with examples. The trick is identifying bad management before it’s too late.

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