I don't know about the dividend going up, but at the present dividend, the pps should be $10+/share. At this price the dividend will still be over 7% which is over 7 times the rate of a bank CD. Seems like a great investment to me.
Think about it. FTR had to drop the dividend to get the money for the VZ deal. Maggie said she wanted to be investment grade with the stock, and FTR has not made it there yet. On the conference call they stated that they are getting cost savings by changing over to their new systems in the old GTE states. They stated that that will add millions in synergies because of the cost they are paying VZ right now. Now we know that they added and are adding HSI connections to get more areas on HSI. I even could hear the sound of Ivan in the conference call when they were talking how many households they were passing on the HSI product. Reminds me of Ivan and Fios. The difference is that HSI cost way less than Fios, slower but costing less. Maggie even talked about voip for the HSI areas. That could make more money in those rural areas. The flip side is that FTR has about used up the old VZ capacity that was out their post deal and will have to start spending money to build the network. Maggie was lucky that VZ financed the sale to FTR since Ftr could not get the money on their own. What did that say about their finances? The thoughts now are do you think interest rates are going to stay low? No. The cost will rise and you have to spend money to make money. The FTR current dividend is too high in a lot of investors minds for a company to be going through what this company is trying to do. If Maggie can keep the same dividend for the next 5 years she will be doing great. I do not think their is a dividend rise for a long while. Just being where we are today is great for this company. We do not need a dividend raise we need time to digest the deal.
Its very hard to tell what they will do for sure. Of course we all would like to see .25 again and I think that it is a good expectation because of the dividend history. They had been at .25 for several years and only decresed the dividend to help with the cost of upgrading the VZ purchase. I think they will eventually go back up but not so sure when that will happen. Maybe within the next one year. Thats my guess as to the length of time it will take for them to smooth out everything from this VZ purchase.