CenturyLink (CTL) is soon to be the nation's third-largest phone company after its acquisition of Embarq in 2009, Qwest in 2010 and the recent takeover of information-technology services provider Savvis.
It has seen institutional buyers outnumber sellers of its stock this year by well more than double, according to Bloomberg.But apparently retail investors aren't part of its investor base, as CenturyLink's shares are getting hammered, losing 22.5% this year and 8.6% over the past 12 months. So why the big institutional investor interest? CenturyLink's gigantic cash flows, which allows it to offer an 8.63% projected dividend yield while at the same time it's funding those three big acquisitions. Currently trading at $33.71 per share, it has a market value of $20.8 billion. Analysts give its shares 12 "strong buy" ratings, one "moderate buy," and five "holds," according to theStreet Ratings.
Windstream (WIN) was formed in July 2006 in the merger of Alltel's fixed-line business and Valor Communications. The firm serves about 2.9 million phone lines, 1.9 million long-distance phone customers, and 1 million high-speed Internet customers. It has operations in 16 states, primarily in the Southeast and southern Midwest. It's also aggressive in making acquisitions, as it recently closed D&E Communications and has announced plans to acquire two relatively small telecommunications firms, NuVox, which serves the Southeast, and Lexcom, a regional services provider based in Aurora, Ill. Windstream has a projected dividend yield of 8.43% on its shares, which are currently trading at $11.82. "The market is paying a premium for dividend yield over other forms of cash deployment, including buybacks and business reinvestment," said Bank of America Merrill Lynch analysts in a research note on Windstar after giving it a "buy" rating. Nevertheless, the shares are down 9% this year, bringing the market value to $6 billion. Its shares are up 2% over the past 12 months. Analysts give it five "strong buy" ratings, one "moderate buy," and nine "holds," according TheStreet Ratings.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV