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Windstream's (NASDAQ:WIN) CEO Jeff Gardner announced that the company will be maintaining its $1 dividend for the foreseeable future. Windstream's stock is down more than 12% after CenturyLink (NYSE:CTL) announced it would be cutting its dividend.

The market has become concerned with land line providers in a world that is increasingly shifting towards mobile. So the concerns over dividend payments for Frontier (NASDAQ:FTR), CenturyLink, and Windstream may concern shareholders. I find it interesting that CEO Jeff Gardner made such a bold move by saying the current dividend is secure.

I consider it a bold move given the uncertainty of revenue from their wire lines going forward. Windstream has a 11.7% dividend compared to Frontier and CenturyLink, which are both under 10%. While the CEO sees the dividend being stable in the future, its simply due to a matter of cutting capex and interest expense.

Windstream will likely be able to maintain its dividend until 2015, but given its yield, the market does seem to think a cut will happen. Gardner also mentioned they still have tax credits until 2015, which will help sustain the dividend.

So knowing this, what is a dividend investor to do?

I believe current investors should slowly liquidate Windstream stock over the next few years. I don't believe Windstream is in a dire situation as long as management can maintain a decent profit. However, investors should take any chance during a market upswing to sell a portion. Just because Windstream doesn't have problems now is no way of assuring the future.

For those looking to invest in Windstream, understand that the possibility of a dividend cut will still happen. Gardner's comments obviously help provide clarity for the near-term, but that's about it. This isn't exactly going to be a great retirement stock for long-term dividend investors if cuts happen.

For 2012, the company had free cash flow of $676 million and paid $588 million in dividends. Now the company does expect to lower capex and interest expense, so I believe the FCF can go to $750 million on a conservative note. So the dividend is still covered, but the payout is very high and will likely be more than 70% of FCF.

CEO Jeff Gardner's comments should help calm shareholders after CenturyLink's cut, but realize that the company is relying on capex and interest expense cuts. In addition to this, the tax credits expire in 2015, which will put pressure on the dividend. Dividend investors should not chase yield unless they fully understand the risks of a cut happening.

Source: Be Cautious With Windstream's Dividend