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CenturyLink: Streamlining A Fat Dividend

Published Wed, 16 May 2018 13:56:53 -0400 on Seeking Alpha

The big takeaway from the transition to Jeff Storey as the CEO of CenturyLink (CTL) is one of a focused business driving margin expansion. The company was too much of a me-too player in a crowded telecom space focused on wireless while not building up a niche in the market. The new streamlined focus even before Jeff becomes the official CEO ensures a path to a lower dividend due to stock gains, and not a future cut.
Source: CenturyLink website
Streamlining Business Anybody listening to the earnings call or reading the transcript would see a different tone to the business. The consolidation of the wireline competitive landscape to three national players from four helps with the pricing environment, but the key to the story for CenturyLink is the combined power with Level 3 makes the company a more efficient player against AT&T (T) and Verizon Communications (VZ). The latter two having a bigger focus on wireless and content potentially allowing CenturyLink to dominate a category where the company is solely focused.
The other part of the story is streamlining the business outside of synergies. The merger is expected to drive $850 million in annual synergies that are a huge boost to free cash flow, but Storey is quickly moving the new CenturyLink in a new direction. The company has two main themes surrounding four initiatives that will clean up the business focus and streamline the areas of focus:
Eliminating OTT service. Eliminating Prism TV service. Digitizing the... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
CENTURYLINK 22.74   12.6 1.81 2.16 9.48


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