How Safe Is CenturyLink's Attractive Dividend?
CenturyLink's (NYSE: CTL) dividend yield, one of the highest in the telecom industry, is attractive to dividend-oriented investors. And its safe payout, at a fraction of the company's healthy free cash flow, makes it even more compelling. But as CenturyLink struggles to offset its declining legacy businesses with growth initiatives, let's take a closer look to see whether that generous dividend is safe.
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CenturyLink's dividend represents a cash outflow of $1.1 billion. Given management forecasted a free cash flow in the range of $3.1 billion to $3.3 billion, the dividend seems safe. But revenue is declining, and this trend could impact free cash flow and threaten the dividend.
Source Fool.com
