We acknowledge Frontier Communications’ integration of Verizon Communications’ landlines might still be a “show me” story, but believe the 8%-plus dividend yield -- and after the transaction close should have the lowest payout ratio of the rural local exchange carrier group -- and accretive free-cash-flow profile present a compelling risk/reward.
Frontier (ticker: FTR ) remains our top large-cap rural local exchange carrier (RLEC) pick. Our estimated fiscal 2016 revenue and adjusted earnings per share are $5.4 billion and seven cents versus $5.54 billion and a loss of 10 cents prior, and we are introducing fiscal 2017 of $5.2 billion and five cents, respectively. [We readrate Frontier at Outperform.]
Nice to see people talking REITs. Some crazies on HCP Board. I am perplexed by the recent activity in REITs - it is just not rational behavior. O going to the moon while the rest of the space languishes; they have destroyed HCP, HCN and Ventas. Hold and Accumulate quietly - that's my plan.