5 High-Yield Telecom Dividends With Strong Starts for 2013

Michael Teague  |

Five Telecommunications companies with market caps over $2 billion are currently providing dividend yields of 5 percent or better to start off 2013. A closer look at the following five companies shows that they all have significant amounts of cash they are studiously investing in growth and acquisitions. At the same time all of them have been very investor-friendly, with solid revenue streams and an overall strategy that involves keeping dividends on an upward trajectory. This makes them worthy of consideration for dividend portfolios.

BCE Inc. (BCE), is a Canadian Telecom with a market cap of $34.05 billion, and a Year-to-Date performance that is currently up 3.73 percent. With shares trading at $43.96, their yield is $2.30, which translates to a 5.10 percent gain for investors. The company raised dividends by $.010 in August and another $0.06 yesterday after the release of their fourth quarter earnings report, which suggests that we might expect more of the same from them in the future.

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The other four in this list are American companies. CenturyLink Inc. (CTL), has a market cap of $25.70 billion. Their shares are currently trading at $41.32, with a yield of $2.90, a 7.10 percent profit for investors. One of the biggest Telecoms in the United States, its YTD performance is a solid 5.24 percent, and it has recently stabilized and increased revenue streams with its acquisitions of Embarq, Savvis, and Qwest, which has allowed the company to tap into wholesale and enterprise, sectors that are traditionally more reliable than the residential and business on which it had previously been focused.

Frontier Communications Corp. (FTR) sports a market cap of $4.55 billion, and is currently trading at $4.58 per share. Their yield is $.040, translating to an 8.10 percent gain for shareholders. Their YTD trajectory has likewise been upwards, at 6.54 percent. This is especially impressive as FTR has, in the past year, accumulated large amounts of debt resulting from the need to integrate acquisitions and cut operational costs. It is entirely possible that these figures will increase once all of this gets smoothed out.

Windstream Corp. (WIN) has a present cap of $5.80 billion. Trading right now at $9.82, it is returning to investors at a rate of $1, a 10.10 percent profit. Their YTD figure is impressive, up 19.20 percent, and seems well disposed when considering the announcement on Thursday that its MPLS networking solutions have been certified by the Metro Ethernet Forum, extending the company’s reach into the business community.

Finally, there’s the giant of this group, AT&T (T). With its market cap of $196.84 billion, and trading at $35.20, its YTD number is 5.98 percent in the positive. The return for investors is $1.80 per share, a return of 5.10 percent. Similar to the aforementioned Telecoms, T is investing a great deal in growth and they have the cash to do it. It is entirely plausible that their dividend yields will increase in the coming year.

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