Although CenturyLink (CTL) is still the primus inter pares of the rural telecom sector even after its recent dividend reduction we have also been covering its two largest competitors Frontier Communications Corporation (FTR) and Windstream Corporation (WIN). Windstream's shares generated a negative 22% total return in 2012 but bounced back by 7.55% because investors are relieved that Windstream hasn't cut its dividend, or at least not yet. We began warming up to Windstream's 11.5% yield because Windstream's shares have been beaten so badly throughout 2012 and because we were expecting it to ease back on its capital investment program in 2013.

We were pleased to see that Windstream's management confirmed our expectations on its CapEx and that it would reduce its capital expenses to $800M-$850M versus the $1.1B spent in 2012. However, we're keeping our eyes on it because WIN's Q1 2013 CapEx was slightly higher than its Q1

Frontier Communications (FTR) has been suffering from a declining customer base and contracting revenues. As a wire line service provider, FTR might be losing customers as they simply cut the cord and go wireless. Without question, this is probably the case for at least some defections. FTR noted in its 2012 10-K this possibility:

Our competitors include competitive local exchange carriers, Internet service providers, wireless companies, VoIP providers and cable companies that may provide services competitive with the services that we offer or intend to introduce. We also believe that wireless and cable telephony providers have increased their penetration of various services in our markets. We expect that we will continue to lose customers and that competition will remain robust.- FTR 2012 10-K

However, FTR also notes that it primarily serves rural areas in 27 states. A deeper analysis of demographic trends shows an even more worrying picture for

This Morningstar/YChart (M/Y) report series was encouraged by Seeking Alpha reader requests and began in February. It complemented my reports of possible dividend yield based buy opportunities from eight major market sectors as listed by Yahoo Finance which I've posted since the fall of 2011.

So, responding to both Seeking Alpha reader requests and Ycharts.com migration to an eleven sector list, this report provided three actionable conclusions about the highest yield (dividend / price) stocks from one of the Morningstar/YCharts (M/Y) sectors: basic materials; communication services; consumer cyclical; consumer defensive; energy; financial services; healthcare; industrials; real estate; technology; utilities.

Dog theory picks were supplemented by one year mean target price estimates from broker analysts. Those combined results composed the Arnold m/y consumer cyclical sector selections for April shown below.

Dog Metrics Found Ten Top Communication Services Dogs

The ten best communication services stocks

Frontier Communications Corp.'s (FTR) 10-Q has been made available this past week, which expands upon the company's earnings announcement. FTR is the fourth largest Incumbent Local Exchange Carrier (ILEC) in the U.S. It serves customers, primarily rural and located in smaller and medium towns, in 27 states. Its total customer count is 3.14 million with 2.86 million residential customers. FTR provides a range of services from basic telephone service to data to broadband to video services. Most notable in its recent history would be its acquisition of Verizon Communications' (VZ) wireline assets, which was announced in 2009 and completed in 2010. The stock price recently closed at $4.25 per share, up 21% from its price of $3.50 a year ago. However, FTR is still down substantially from its acquisition of the VZ assets.

Frontier is Sharing Less Information

In digging through the 10-Q, it is clear that FTR

INTRODUCTION

In our last article we said Frontier Communications' (FTR) major challenge is to stop the continuous bleed in revenue. Frontier Communications released their 2013 first quarter results on May 6. Based on the revenue challenge ahead of them this article will limit the discussion to the following:

• Revenue trend
• Effects on FCF estimates
• Conclusion

REVENUE TREND

We'll start with the trends projected from our last article through the period ending December 2012 then compare this to recent results. The graph measures management's efforts to bend the curve upward.

(click to enlarge)

Now that integration is behind them, it's reasonable to expect their performance to improve but how that will influence revenue performance beyond the current trend is yet to be known. We would not have expected one quarter to produce drastic changes but indicate whether the curve is being nudged up or down, however the first quarter

Q1 2013 Earnings Conference Call

May 06, 2013, 4:30 pm ET

Executives

Luke Szymczak - Vice President of Investor Relations

Maggie Wilderotter - Chairman of the Board, Chief Executive Officer

Daniel McCarthy - President, Chief Operating Officer

John Jureller - Executive Vice President and Chief Financial Officer

Analysts

Batya Levi - UBS Investment Bank

Mike McCormack - Nomura Securities

Phil Cusick - JPMorgan

Frank Louthan - Raymond James

Kevin Smithen - Macquarie

Jonathan Epstein - Deutsche Bank Securities

Scott Goldman - Goldman Sachs

Presentation

Operator

Good day, everyone, and welcome to the Frontier Communications first quarter 2013 results conference call. This call is being recorded.

At this time, I would like to hand the call over to Mr. Luke Szymczak. Please go ahead, sir.

Luke Szymczak

Thank you and welcome to the Frontier Communications first quarter earnings call. My name is Luke Szymczak, Vice President of

This article reports tantalizing tales of technology sector stocks tallied as of market closing prices April 26 using the Dow dividend dog methodology. This report series started in the fall of 2011 using the dog methods to reveal possible buy opportunities in each of the eight major market sectors listed by Yahoo Finance: basic materials (BasMats), consumer goods (ConGo), financials (Fins), healthcare (Heal), industrial goods (IndiGo), services (Svcs), technology (Tec), and utilities (Utes).

Below, the dog theory picks reporting the highest yield (dividend / price) from Yahoo sectors were supplemented with one year mean target price estimates from broker analysts. Below then are my Arnold technology sector selections for April.

Dog Metrics Tag Ten Top Technology Stocks

The top ten technology sector stocks from Yahoo Finance showing the biggest dividend yields as of April 26 represented five industries. The top technology sector stock, Windstream Corporation

Searching for the best value stocks, I decided to rank all the stocks that are included in the S&P 500 Index by the sum of their dividend and earnings yields.

Earnings are defined as:

The earnings per share for the most recent 12-month period divided by the current market price per share. The earnings yield (which is the inverse of the P/E ratio) shows the percentage of each dollar invested in the stock that was earned by the company. The earnings yield is used by many investment managers to determine optimal asset allocations.

I used the Portfolio123's powerful ranking system to grade all S&P 500 stocks based on this theme. All the data for this article were taken from Portfolio123.

The ranking system that I built searched for the best 20 stocks that are included in the S&P 500 by the sum of their dividend and earnings yields.

As the saying goes, once you hit the top, there's nowhere to go but down. That's especially true for companies making it to the list of the top five highest-yielding stocks in the S&P 500.

Consider the following: Over the last year or so, Frontier Communications (FTR), RadioShack (RSH), and CenturyLink (CTL) all spent time on the list. And, lo and behold, their dividends got slashed and share prices cratered. Pitney Bowes (PBI) is the latest company to join the ranks of these dividend disappointers. On Tuesday, management announced that first-quarter earnings sank 57%, and they were cutting the dividend in half -- from $0.375 per quarter to $0.1875.

As Chief Executive Marc Lautenbach said, "This action will provide us the added financial flexibility to invest in the business and enhance our capital structure, while continuing to provide a very competitive return to shareholders." Sure.

By Matt Doiron

Income investors like to look for stocks with high dividend yields, and a policy of returning cash to shareholders is considered a plus by many others in the investment community as well if a company has limited growth opportunities. Sometimes, however, interest from yield seekers can bid a stock price above fundamental value, attracting short sellers; for this and other reasons, we think that it can be wise for income investors to take note of apparently attractive companies with high short interest. Here are five stocks which feature daily dollar volume over $10 million and dividend yields of 4% or higher going by current prices and recent dividend levels, and which have high levels of short interest:

Frontier Communications (FTR) is an excellent example of what we are looking for; judging by recent dividend payments, the yield is close to 10%, yet 22% of the float is

Back in November, Stone Fox Capital wrote how, despite the big sell-off in the stock, the Windstream (WIN) dividend was likely safe. Unfortunately months later, investors still question the high yield as the dividend payment absorbs most of the free cash flow. While the market is obsessed with dividend payouts, the company would be fiscally sound if it would cut the dividend and use that cash to pay down debt and buy back stock down the road.

The company is a leading provider of advanced network communications to businesses nationwide while also offering broadband and phone services to consumers in rural areas.

In order to maintain the current juicy 12% dividend, the company must produce enough free cash flow to cover the cash distribution. Lately that equation has come into question with a flat revenue base as capital expenditures have soared.

Dividend Problem

On the Q412 earnings report

I suspect that many investors looking for income use different types of screening devices to look for yield. Whether it is the tools on various trading platforms or lists of those stocks with the highest yield in business sections of daily or weekly newspapers or magazines, the selection starts with looking at the quarterly dividend. Investors may further filter out their selections by limiting selections to those that have a long history of paying out dividends, steadily increasing their dividends, or both. What many fail to realize, at least until tax time comes around, is that those dividends may not even be dividends. And, if the position is in some type of tax advantaged account, the investor may not even find out at that time.

I have been writing about a number of stocks on Seeking Alpha for nearly two years. Almost all of these make some type of quarterly

Utility stocks have long been known as good dividend payers. Many utilities are regulated businesses with highly predictable returns and consistent track records of growth. This enables them to pay consistent and growing dividends. This article will take a broad look at the utility sector, as defined by Zacks.com, and identify some of the top dividend performers.

More than just electric power

The utility sector is actually a diverse sector. A simple way of thinking about it would be to consider all the companies that provide basic services that a home needs. This ranges from water to power to natural gas to communications. Some of these industries, most notably power and gas, are often highly regulated. However, there are a fair number of states that allow competition for electricity. This occurs at a retail level, while the distribution utility (e.g., company that manages the wires to your house) will

The Gist

The stocks covered in this article are well positioned to rally based on macroeconomic, sector or company specific catalysts coupled with fundamental buying opportunities. However, many are trading at significant discounts to their 52 week highs and consensus estimates. With many stocks trading near all-time highs, I have selected five stocks that still have upside potential. I posit they are worth a look.

Additionally, the five stocks are trading at or below $5. Stocks trading for $5 or less tend to be more volatile with frequent, larger percentage moves in the stock price. This provides the opportunity for greater returns (or losses) relative to the market or more bang for your buck so to say.

The Goods

In the following sections, we will perform a review of the fundamental and technical state of each company followed by an analysis of the underlying catalysts and downside risks for the

Frontier Communications Inc. (FTR) is now entering a critical phase of its operations. Its 2010 (announced in 2009, completed in 2010) acquisition of Verizon Communications (VZ) wireline assets was accompanied by bold proclamations that have largely gone unmet. Among the superlatives mentioned in the announcement release were 7 million access lines and $6.5 billion in revenue. The reality is much grimmer, analyst average revenue for 2013 is a paltry $4.8 billion, declining by 4% to $4.6 billion in 2014. Every quarter, since the acquisition was completed, has posted lower revenue and fewer access lines than the previous quarter. Those 7 million access lines are now fewer than 5 million.

For years, the dividend was a consistent $0.25 per quarter. Then it was cut to $0.1875 at transaction close to give a 9.9% yield, which at the time, still offered a very nice yield. The announcement described it as