Frontier Unlikely to Cut Its Dividend Like Windstream Did

Shares of Frontier Communications (FTR) have stabilized around the $15 range after last week's tumultuous trading in the telecom services sector. Windstream Communications (WIN) tanked last Thursday after it eliminated its dividend and brought down shares of Frontier and CenturyLink (CTL) along with it. Frontier had staged a nice rally the day before after reporting results, but that was more than eliminated the next day.

This Wednesday, Raymond James analysts Frank G. Louthan and Alexander Sklar, who give Frontier an Outpeform rating, hosted a lunch meeting with members of Frontier management and had some positive points to make.

First, and probably foremost to most investors, they don't expect Frontier to slash its dividend in the next two years like Windstream did. Frontier's current dividend yield is 16%, a level which indicates broader market expectations of a cut, but they point out that the current shareholder base prizes that...