Windstream Holdings, Inc. (NASDAQ:WIN): Earnings Only Strengthens Its Dividend Yield Conundrum


Dallas, Texas 11/14/2013 (Financialstrend) – Recently, Windstream Holdings Inc. (NASDAQ:WIN) surprised by maintaining its incredibly high dividend yield of 11%. The report of most recent earnings puts pressure on the shares, but this case about earnings versus dividend would be the same even if the company managed to some extent exceeds expectations of earnings.

 Earnings of $0.08 per share were very low in comparison with the expectation. The revenue of the company was reduced by almost 3% as compared to last year to $1.503 billion and also it was less than the estimates. Windstream Holdings Inc. (NASDAQ:WIN) is highly leveraged and quarterly dividend of the company is $0.25 per share.

The amount of cash during the 3rd quarter was $73.4 million as compared to $132 million of last year. The amount of adjusted free cash flow was $264 million and the capital spending of the company was $187.4 million. The amount of long-term debt and capital lease obligations were $8.79 billion as compared to $8.1 billion of previous year.

The issue always arises with the company is that, how it is able to manage its cash flows in a manner that it is able to pay higher dividends, which is more than its income? Many companies can do this, and Windstream Holdings Inc. (NASDAQ:WIN) has also managed to do it. It is said that, along with higher earnings, most of the investors are looking for dividend coverage instead of creative cash flow management.

Price update:

While trading on November 13, 2013, the shares of Windstream Holdings Inc. (NASDAQ:WIN)’s percentage change plunged +1.22% to close at $8.28 with the total traded volume of 4.81 million shares and average volume of 5.56 million. The 52 week low of the stock is $7.50 and 52 week high is $10.00.

Company Brief:

The company is engaged in providing communications and technology solutions in U.S. it provides cloud computing and managed services to business along with voice, broadband and video services to customers mainly in rural markets.