NEW YORK, NY -- (Marketwire) -- 06/01/12 -- Dividends have been gaining popularity among investors as treasury yields and interest rates are at record lows. The telecom industry is highly regarded among dividend investors, as several domestic telecom operators have dividend yields exceeding 5 percent. Five Star Equities examines the outlook for companies in the Telecom Industry and provides equity research on Alaska Communications Systems Group, Inc. (NASDAQ: ALSK) and Frontier Communications Corp. (NASDAQ: FTR).
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But a recent report released by Standard & Poor's states that telecom companies may have hard time maintaining their high yields. "Returning cash to shareholders through dividends and share buybacks and the pressure to satisfy equity investors lessens their ability to pay back debt and maintain or reduce leverage," said Standard & Poor's credit analyst Allyn Arden in the report. "These companies may need to adopt more conservative financial policies and reduce leverage to be able to maintain their current ratings down the line," added Mr. Arden.
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Alaska Communications Systems Group is a leading provider of high-speed wireless, mobile broadband, Internet, local, long-distance and advanced broadband solutions for businesses and consumers in Alaska. The Alaska Communications network includes advanced broadband and voice networks and the most diverse undersea fiber optic system connecting Alaska to the contiguous United States. The company currently pays an annual dividend of $0.20 per share for a yield of 10.5 percent.
Frontier Communications offers voice, broadband, satellite video, wireless Internet data access, data security solutions, bundled offerings and specialized bundles for residential customers, small businesses and home offices, and advanced business communications for medium and large businesses in 27 states. The company currently offers an annual dividend of $0.40 per share for a yield of 11.17 percent.
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