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Today’s article will review 5 Telecom companies to see if they have a place in your portfolio. I am reviewing these companies because dividend investors often rely on the telecom sector to meet their dividend needs. Here is an analysis of key names that investors buy for their dividends:

Alaska Communication Systems (NASDAQ:ALSK) ALSK has a market cap of $294.26 million with a negative price to earnings ratio. The stock has traded In a 52 week range between $5.59 and $11.65. The stock is currently trading around $7. The company reported second quarter revenues of $84.9 million compared to revenues of $84.5 million in the second quarter of 2010. Second quarter net income was $-30.7 million compared to net income of $34.1 million in the second quarter of 2010.

One of ALSK competitors is General Communications Inc. (NASDAQ:GNCMA). GNCMA is currently trading around $9 with a market cap of $414.06 million and a price to earnings ratio of 98.37. GNCMA does not pay a dividend versus ALSK which pays a dividend with a yield of 13.7%.

ALSK has lost money in two out of the last three years, and in 2010, the company had net income of $-30.7 million. The company’s balance sheet is in a shambles. In 2010, the company’s stockholders equity slipped to $-20.48 million from $30 million in 2009. ALSK ended 2010 with $20.2 million in cash but had $569.9 million in debt. The poor earnings and weak balance sheet has spooked investors, and the stock is down by 35.58% over the last 52 weeks. The company has done a good job of paying dividends. It has paid quarterly dividends since 2004 and has been paying an annual dividend of $0.86 since 2006. Unfortunately, its future dividend payments are in doubt. If the company is unable to maintain its dividend, the stock price is likely to drop even further. I rate ALSK as a sell.

Frontier Communications Corporation (NASDAQ:FTR) FTR has a market cap of $5.97 billion with a price to earnings ratio of 36.81. The stock has traded in a 52 week range between $5.33 and $9.84. The stock is currently trading around $6. The company reported second quarter revenues of $1.32 billion compared to revenues of $516 million in the second quarter of 2010. Second quarter net income was $153 million compared to net income of $121 million in 2010.

One of FTR’s competitors is Century Link Inc. (NYSE:CTL). CTL is currently trading around $34 with a market cap of $20.64 billion and a price to earnings ratio of 16.83. CTL pays a dividend which yields 8.7% versus FTR whose dividend yields 12.7%.

FTR provides long distance phone service and Internet access to small communities throughout the United States. The company has seen relatively stable earnings over the last four quarters despite its July 2010 purchase of the Verizon Communications (NYSE:VZ) wireline division. As a result of the purchase, the company’s year-over-year second quarter revenues rose by 156% but net income decreased by 8%. It appears that the integration of the two companies is coming along quite well. Once the integration is complete, expense will be reduced and net income will increase. FTR like most other telecommunication companies has seen its stock price take a beating over the last 52 weeks. Over the last 52 weeks, its stock price has dropped by 32.28%. If the company is able to maintain its dividend, the stock price should rebound. The company has a strong free cash flow and well as about $233 million in cash on hand. I think the drop in the stock price gives investors a good buying opportunity, but I would wait to see third quarter results before making a purchase. I rate FTR as a hold.

Consolidated Communications Holdings Inc. (NASDAQ:CNSL) CNSL has a market cap of $537.64 million with a price to earnings ratio of 17.06. The stock has traded in a 52 week range between $16.77 and $20.02. The stock is currently trading around $18. The company reported second quarter revenues of $92.6 million compared to revenues of $95.7 million in the second quarter of 2010. Second quarter net income was $5.35 million compared to $7.05 million in the second quarter of 2010.

One of CNSL competitors is AT&T Inc. (NYSE:T). AT&T is currently trading around $29 with a market cap of $172.45 billion and a price to earnings ratio of 8.47. AT&T pays a dividend which yields 5.9% versus CNSL whose dividend yields 8.6%.

CNSL has seen its net income increase in each of the last three years by a total of 185.9%. The company which was once a rural wireline telephone company has done a terrific job of reinventing itself. The company has made progress in the faster growing high speed Internet and cable TV businesses, and has also invested in wireless partnerships. The company has a strong dividend paying record and has paid its current dividend of $1.55 in quarterly installments since 2006. CNSL should have no problem maintaining its dividend, because it has a strong free cash flow, and over $82 million in cash. The stock price has held up extremely well for a Telecom company and is down by only 5.4% over the last 52 weeks. Over the last three years, the stock price has gone up by 112%. I believe that CNSL offers investors the potential for capital appreciation along with a strong dividend income. I rate CNSL as a strong buy.

Chunghwa Telecom Co. Ltd America (NYSE:CHT) CHT has a market cap of $25.44 billion with a price to earnings ratio of 16.24. The stock has traded in a 52 week range between $22.85 and $37.46. The stock is currently trading around $33. The company reported 2010 revenues of $6.94 billion compared to revenues of $6.2 billion in 2009. In 2010 net income was $1.67 billion compared to net income of $1.39 billion in 2009.

One of CHT’s competitors is Giga Media Ltd. (NASDAQ:GIGM). GIGM is currently trading around $1 with a market cap of $57.04 million and a negative price to earnings ratio. GIGM does not pay a dividend versus CHT whose dividend yields 4.6%.

CHT is a Taiwan based telecommunications company that has been profitable in each of the last ten years. In 2010, the company increased its net income by 20%. The company currently pays a $1.50 dividend with a 4.6%yield. Maintaining its dividend payments should be no problem as the company has $2.86 billion in cash and equivalents. The stock performance has been outstanding, and over the last 52 weeks it is up by 41.64%. In spite of the stock’s recent performance, it is not very expensive (price to earnings ratio 16.24/price to book ratio 2.21). CHT is a consistently profitable company that pays a strong dividend income. I rate CHT as a buy.

BCE Inc. (NYSE:BCE) BCE has a market cap of $30.03 billion with a price to earnings ratio of 15.35. The stock has traded in a 52 week range between $32.15 and $40.49. The stock is currently trading around $39. The company reported second quarter revenues of $4.96 billion compared to revenues of $4.44 billion in the second quarter of 2010. Second quarter net income was $621 million compared to net income of $617 million in the second quarter of 2010.

One of BCE’s competitors is Rogers Communications (NYSE:RCI). RCI is currently trading around $36 with a market cap of $19.62 billion and a price to earnings ratio of 14.06. RCI pays a dividend which yields 4% versus BCE whose dividend yields 5.4%.

BCE has been profitable in every year for a decade, and in 2010, it increased its net income by 31%. In addition to being a consistent income producer, the company has been an above average dividend paying company. The company has paid quarterly dividends since 1998, and has increased its dividend by 82.8% over the last five years. The company stock has also performed well and is up by 14.34% over the last 52 weeks. BCE provides investors with growing earnings, capital appreciation and a strong and growing dividend income. I rate BCE as a buy.

Source: 3 Telecom Dividend Giants To Buy, 2 To Avoid Now