Windstream (NASDAQ:WIN) is staking its claim on the bleeding edge of the telecom marketplace, but this advanced communications and cloud computing service provider still provides traditional phone service to 638,000 businesses and 1.8 million consumers nationwide. WIN also provides high-speed Internet and digital television services.
WIN offers a current dividend yield of 11.8%, and has consistently paid a dividend since 2006. However, its negative PEG ratio points to challenging near-term earnings, and its forward P/E of nearly 17 is pricey in a sector where even AT&T (NYSE:T) is trading at just 14 times forward earnings. In this highly competitive market, quality of service will be a differentiator.
On Tuesday, the company’s phone network experienced a multi-state outage that lasted more than five hours, and while all service providers experience outages, perception is hard-won in the enterprise market. WIN has upside, but I wouldn’t take that thick yield to the bank just yet.
As of this writing, Susan J. Aluise did not hold a position in any of the aforementioned stocks.