With regard to the dividend, it looks pretty safe from my perspective. While earnings have fallen in the wake of the qwest acquisition, the big "expense" is the dramatic increase in depreciation...a non-cash item. The reality of the matter is they are generating tremendous cash flow. So while the dividend is 100+% of EPS, it's roughly 50% of FCF. Believe it or not, there's still room for the dividend to grow. This company reminds me of the old SBC...now At&t. I think there's a good bit of money to be made here over the next 3-5 years. Earnings & cash flow will also improve as they begin to rollover higher rate debt into lower rate issues. With a current yield at 9%, it's worth the weight.
Jim, After review of several of the comments in this string I would like to make a reply comment although I am not a regular poster. Having mentioned loss of broadband by the old Q regime, I can testify to the fact that regaining/increasing that part of the business is one of the major pushes being made by the leadership in this company. Making money and improving marketshare in rural markets is their expertise. If anything, my worry is that they will struggle with keeping pace in their more metropolitan markets because that is outside of their past business model. Don't count them down and out of the game because they do have the ability to surprise.