Out Fox The $treet

Summary Investors should focus on the solid free cash flow. 12% dividend is abnormally high due to investor fear. Company should consider a more flexible capital allocation strategy. The typical investor interest in Windstream ( WIN ) centers on whether the company can continue paying out a $1 annual dividend that equals a 12% yield. The bizarre focus on what the company pays out to shareholders has investors looking in the wrong direction. Windstream is a provider of advanced network communications to businesses and consumers primarily in suburban and rural areas. The company continues to transition from legacy voice consumer services to more advanced cloud computing, managed services, broadband, and digital TV services. Read the full article at Seeking Alpha. Disclosure: Long CTL. Please review the disclaimer page for more details. 

When Windstream (WIN) reported earnings last week, investors took the stock down to 52-week lows over concerns the company wouldn't have the ability to pay the dividend going forward. The local telecommunications provider missed earnings yet again, but more disappointing is that capital expenditures continue to creep higher. In order to maintain that juicy 12% dividend, the company must produce enough free cash flow to cover the cash distribution. Lately that equation has come into question even with an increasing revenue base as capital expenditures have soared. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details.