How Safe Is Windstream’s Dividend?

Our first article on Windstream (WIN) concluded:

Waiting to see how the second half develops may be the prudent path before allocating new or additional cash toward this investment.

The day the article was published Windstream closed at 11.27. While dividends have been sustainable there are dark clouds putting downward pressure on the stock price which included the uncertainty of future cash taxes, revenue growth not as robust as investors hoped and a high leverage ratio. Our last article which brought us through the first half of 2013 concluded:

Management can sustain the dividend for several years given the current revenue and customer trends provided management can accept a high FCF payout and leverage ratios. In the meantime the challenge is to reverse the overall revenue trend which will pull the ratios toward more acceptable levels.

Question is has anything changed for better or worse now that we have 2014 guidance and additional insight on future cash taxes?

This article examines:

  • Revenue trends based on results and guidance; both used to project financials, more importantly free cash flow on.
  • Risks
  • Final thoughts


Windstream recently released fourth quarter and full year results providing the 2014 outlook and cash tax guidance through 2015. The trends through the first half of 2013 are shown with the recent trends to get an idea whether they are improving or not.
…Click Here To Continue To The Full Article…

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