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UPDATE: Pivotal Research Group Initiates Windstream Corporation at Hold on Yield Visibility

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Pivotal Research Group initiated coverage on Windstream Corporation (NASDAQ: WIN) with a Hold rating and a $8 price target.

Pivotal Research Group commented, "WIN's stock has underperformed the RLEC peer group over the past quarter on concerns that the dividend payout ratio is unsustainably high and could potentially be cut. While based on our model the current $1 dividend is adequately covered, there is very little margin for error in our view. WIN management has done the logical thing in acquiring higher growth CLEC, fiber, and data center assets over the past few years, but these deals in our view do not move the needle enough with regard to EBITDA and FCF growth. With WIN's leverage still relatively high at 3.7x and a payout ratio of 77%, we prefer other RLECs such as BUY rated CTL and FTR which have lower payout ratios and slightly lower (and in our view much safer) dividend yields."

Windstream Corporation closed at $8.80 on Wednesday.

Latest Ratings for WIN

DateFirmActionFromTo
Aug 2014DA DavidsonDowngradesBuyNeutral
Jul 2014CitigroupMaintainsNeutral
Jul 2014NomuraUpgradesReduceNeutral

View More Analyst Ratings for WIN
View the Latest Analyst Ratings

Posted-In: Pivotal Research GroupAnalyst Color Initiation Intraday Update Analyst Ratings

 

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