What A Nasty Dividend Stock Looks Like

On the list of possible mistakes that an income investor can make, one of them is yield-chasing which refers to buying an ownership position in a business simply because it has a very high dividend yield. Absent a terrible recession like 1973-1974 or 2008-2009 in which the prices of even high quality businesses get cheap, companies usually only have yields like this because they are low-quality businesses with questionable long-term cash flows and/or a poor relationship between the company’s debt load and those cash flows.

One of those companies that regularly attracts the attention of income investors in Windstream. Windstream is a telecom company that runs the wirelines for people that need internet and phone service on the middle of nowhere, and it services 3 million customers across 29 states. It has caught the attention of many investors because it has maintained a $1 dividend since 2007, and people see … Read the rest of this article!