Sunday, September 7, 2014

Frontier Communications: Capital Structure Doesn't Make Sense


Summary

  • Frontier Communications has a capital structure too focused on maintaining a historical dividend.
  • High debt load causes interest expense to hit operating income.
  • Stock is reasonably valued but the large stock gains leave limited upside from these levels.
 Reviewing the recent results of Frontier Communications (NASDAQ:FTR) and the capital structure just doesn't make sense. Sure the local communications provider has stable revenues and cash flows that provide a level of opportunity, it doesn't make any sense for the company to continue paying lofty dividends while under a large debt burden.


Read the full article at Seeking Alpha.


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