Windstream Corporation (WIN)

Windstream is a relatively new company with a 6.4B market cap which was formed through the spinoff of Alltel’s landline business and merger with VALOR Telecom. It offers telephone, broadband and digital television services for approximately 3.4 million access lines in 16 states: Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, Missouri, Nebraska, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina and Texas. WIN is headquartered in Little Rock, Arkansas.

The shares pay a $.25 quarterly dividend, resulting in an amazing yield of 7.17% at the current price. This stock has not been a shining star during our phenomenal telecom rally, but after formation of a double bottom in January and July, it appears a new uptrend could be getting under way. WIN recently reported a nice earnings increase and a sharp rise in broadband subscribers. Their earnings may be sufficient to continue paying the dividend but that is an open question.

NYSE does not give a beta for the stock (I believe they use three years of data). Google Finance says the beta is 1.00 and Yahoo Finance says the beta is 1.27. WIN is definitely more volatile than T or VZ.

The prospect for continued growth of WIN’s earnings is murky at best. The recent rally hasn’t shown convincing volume, and it may be losing momentum. A pullback wouldn’t be surprising. However, that might be a good opportunity to buy WIN as a speculation. There has been some recent insider buying.


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